Virgin Atlantic has blamed the impact of the Olympics on business travel as the airline’s losses widened to £93 million for its last financial year.
Sir Richard Branson’s airline went into the red for the second consecutive year – after making a loss of £80 million in the previous year.
But despite the increased losses, new Virgin Atlantic chief executive Craig Kreeger said the carrier was still on course to return to profitability within two years.
“Last year saw a double dip recession, a continued weak macro economy, and an Olympic Games which, although a fantastic event, severely dented demand for business travel,” said Kreeger.
“Despite these challenging circumstances, the enduring strength of the Virgin Atlantic brand has not wavered – we have increased our revenues, our load factors, and carried many more passengers than the previous year.
“I am confident we have concrete plans in place to take Virgin Atlantic forward and return the business to profitability within a two-year time frame. The commitment of our staff and loyal customer base is not to be overlooked and as a brand with high advocacy we will continue to innovate and inspire in true Virgin spirit.”
Virgin Atlantic Limited, which also includes leisure tour operator Virgin Holidays, made an overall pre-tax loss of £69.9 million for the year to the end of February 2013.
Revenue for the group was up by 5 per cent to £2.87 billion while airline passenger numbers rose by 3.5 per cent to 5.5 million including a 9.2 per cent increase in those travelling in premium economy and Upper Class.
Virgin Atlantic said it expected that a series of developments would help to turn around its financial performance such as the launch of its domestic Little Red flights, the planned joint venture with Delta across the Atlantic and the benefit of new more fuel-efficient aircraft.
The airline is also looking to reduce costs by £45 million in the next year – mainly through cuts to its back-office operations.
virgin-atlantic.com