Virgin Atlantic Airways Reports $30.1 Million Profit for 2010-11
Virgin Atlantic Airways Reports $30.1 Million Profit for 2010-11
Virgin Atlantic Airways announced a $162.9 million investment in product development as it reported a strong year and a return to profitability. Despite the winter closure of London Heathrow and the ash cloud crisis costing the business a combined $65.2 million, strong growth in business traffic and solid load factors across all cabins delivered a good recovery.
For the 2010-11 fiscal year, Virgin Atlantic reported a pre-tax operating profit of $30.1 million, as total revenues increased by 13 percent to $4.4 billion, and cargo revenue increased by 39 percent to $364.9 million. For the first quarter of the 2011-12 fiscal year, the airline reported a 7.6 percent increase in total revenues to $1.07 billion, the introduction of two new Airbus A330s on leisure routes, and the launch of a new Manchester-Las Vegas route.
The airline reported a 21 percent growth in revenue on the routes between the U.S. and the U.K., which include five daily flights from New York to Heathrow, summer flights from Orlando to three U.K. airports, and service from eight other destinations.
“These are excellent results for the U.S.,” said Chris Rossi, senior vice president of Virgin Atlantic in North America. “In a challenging environment for the industry, we're delighted to have grown revenue by 21 percent year over year. Stronger economic performance on both sides of the Atlantic produced healthy growth in traffic, passenger market share gains across our gateways and more rational market capacity."
“We will continue to differentiate ourselves by offering outstanding products and customer service both in the air and on the ground. We're excited about where Virgin Atlantic is headed in the U.S. market, and there's a lot more to come,” Rossi said.
"We have demonstrated the resilience of our business by weathering the toughest economic period for aviation and have now returned the business to profit,” said Steve Ridgway, chief executive of Virgin Atlantic. “A sharp recovery in the first half of the year has been tempered by more challenged trading in the latter period due to increased capacity in the market and high fuel prices.”
“Whilst we have been very focused on trading the airline back to profitability, we have worked hard to introduce new aircraft, new routes and extra rotations to the existing network where there has been high demand. This year we are investing heavily in new product innovation so that we retain and enhance our leadership in customer service and experience," said Ridgway.
“Since the turn of the year, market conditions have become tougher with increased capacity, faltering consumer confidence and high fuel prices,” Ridgway said. “We are also seeing softer trading in the areas that are hit hardest by the continued rises in Air Passenger Duty, particularly the Caribbean routes and Premium Economy cabins. Whilst business traffic remains strong, demand in the economy cabin is more challenged.”
The airlines $162.9 million investment in product development will include the purchase of new aircraft, updating the interiors of existing aircraft and the installation of in-flight Internet technology. The investment plan is expected to create 1,000 jobs across the airline, and will include major recruitment drives for pilots and cabin crew.
