Slight increase in profits at Virgin Atlantic in 2015

Slight increase in profits at Virgin Atlantic in 2015

Virgin Atlantic has reported a profit before tax and exceptional items of £22.5 million for the year to December 31st.

This represents an improvement of £10.1 million on the previous year’s result when adjusted for IFRS reporting and is driven by growth at both Virgin Atlantic and Virgin Holidays. 

Virgin Holidays performed strongly and made a substantial contribution to this result, with a profit before tax and exceptional items of £10.9 million, (a £5 million year on year improvement which accounts for almost half of the overall profit figure.)   

Group revenue stood at £2.78 billion for the year, while Virgin Atlantic recorded average revenue passenger load factor of 76.8 per cent.

The airline flew 5,939,000 passengers to 29 non-stop destination, including approximately 400,000 connecting between Virgin Atlantic and Delta Air Lines.

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Some 325,000 customers were booked Virgin Holidays, visiting over 40 destinations.

Virgin Atlantic chief Executive, Craig Kreeger, said:  “We achieved these improved results in a year in which we also transformed our business and network, laying the foundations for a robust and enduring Virgin Atlantic. 

“Having successfully returned to profit, this was the first full year of our four-year plan to deliver long-term success and profitability.

“We remained focused on our customers and it is a testament to our people that our satisfaction scores have continued to improve - I want to thank them for the tremendous work they do, every day. 

“As we look ahead to a pivotal year in 2016 we will be investing into services and technology to benefit our customers and people, and will continue our £300 million customer experience investment.

“This year will see a new Passenger Service System, more new Boeing 787-9 aircraft arriving, a Wi-Fi rollout and a retrofitting programme on our Airbus A330-300 fleet.” 

“Oil prices fell by 34 per cent through 2015, which delivered fuel cost savings to Virgin Atlantic, but also realised hedging losses amounting to £198 million.

“Having returned to profit after several loss-making years in 2014 and setting the foundations for future success in 2015, Virgin Atlantic is now targeting a significant growth in profit in 2016, as it continues to deliver towards its target of record and sustained profitability by 2018.”

Virgin Atlantic’s Joint Venture partnership with Delta Air Lines continues to strengthen, with a contribution to profit that increased by 55 per cent year on year and close to 400,000 customers connecting between the two airlines.

The partnership’s total number of code share routes is now more than 550 with up to 43 peak day transatlantic services from summer 2016. 

Virgin Atlantic significantly strengthened its liquidity position this year with an innovative slot financing transaction that raised £220 million from the capital markets.

Through this finance it purchased outright its first brand new aircraft – a Boeing 787-9 – that entered the fleet in December 2015. 

This acquisition is part of a multi-billion fleet transformation programme that saw Virgin Atlantic introduce seven Boeing 787-9s in 2015.

This reduced the average aircraft age from ten years to eight and makes Virgin Atlantic’s fleet one of the youngest and most fuel efficient.