Virgin Announces Profits and Plans
Virgin Atlantic Ltd today published its results for the 12 months ending 28 February 2005 which show a pre tax profit of £68m on a turnover of £1.630 billion. This is the highest profit figure since 1999. Last year’s results showed a profit of £20.9million on a turnover of £1.272 billion for the 10 months ended 29 February 2004.Virgin Atlantic also announced plans to add two new routes in 2006, Dubai and Montego Bay, Jamaica, in addition to route launches in 2005 to Mumbai, Havana and Nassau.
The results cover the activities of the airline and its holiday and cargo operations. The operating environment during the year continued to challenge airlines with overcapacity on routes across the North Atlantic, soaring fuel prices and slow economic recovery.
During the financial year Virgin Atlantic flew 4.4million passengers, up from 3.4million the previous reporting period and the average number of people employed by the group rose from 7519 to 8118.
Commenting on the results Sir Richard Branson, Chairman of the company, said:
“In a challenging year when many leading players in the airline industry continued to struggle to survive I am very pleased and proud that Virgin Atlantic has recorded healthy increases in both turnover and profit. This has been down to the dedication and professionalism of all our staff over the year and the introduction of the award winning Upper Class Suite which has taken the market by storm and brought us more Upper Class passengers so increasing our load factor.
“Rising oil prices undid some of our good work and regrettably we were left with no option but to introduce fuel surcharges from May 2004, although these only recovered around one third of the £60million extra costs we faced over the year.
“Despite the burden of fuel rises we remained committed to innovation, investment and growth. This strategy gave our staff the platform to deliver great service to our passengers. The Virgin Atlantic team under Steve Ridgway ensured great operational performance as well as keeping a tight control of costs. For the third year running our staff will receive an annual profit-related bonus.
“That strategy will continue with planned annual growth of over 10% through expanding our fleet, adding new routes like Mumbai, Cuba and the Bahamas this year together with Dubai and Jamaica in 2006 and continuing to take market share from our rivals in the growing business travel market with our award winning Upper Class Suite.”
During the financial year Virgin Atlantic added three new Airbus A340-600 aircraft bringing the total fleet to 31, at an average age of 5 years 6 months. In August 2004, the airline announced an order for up to 26 more A340-600’s, worth $5.5billion. A long-standing ambition to operate services to Australia was fulfilled in December when services between Hong Kong and Sydney were launched and extra flights were added to Delhi and Shanghai. The Upper Class Suite continued to set a new benchmark for the business class sector and is now on board all Boeing 747-400 and Airbus A340-600 aircraft. Since its launch it has won 10 of the most prestigious design awards in the industry.
Sir Richard Branson also said:
“Our tour operator, Virgin Holidays, continued its recent impressive performance. Its turnover grew to £407million (£314million in the 10 months ended February 2004) on the back of its high quality, high value product range enabling it to win no less than 27 awards from consumers, destinations, airlines and hotels.
“Virgin Cargo also delivered another excellent performance winning Cargo Airline of the Year award for the third year running in 2004 through excellent customer service in the traditional sector as well as in the carriage of over 1000 cats and dogs.
“Finally, one of our most exciting challenges ever made great progress. I was honoured to sign an agreement on behalf of Virgin Atlantic with the Nigerian Government in September 2004 to establish a new airline for Nigeria to be called Virgin Nigeria Airways. Virgin Nigeria is majority owned by Nigerian institutional investors with Virgin Atlantic owning 49%. Virgin Atlantic will be the strategic partner, providing technical expertise to ensure it operates to the highest international standards. The first flight should operate soon on what we hope will be a historic day for Nigerian aviation.”