VIRGIN TAKES OFF WITH PROFIT

VIRGIN TAKES OFF WITH PROFIT
VIRGIN Australia Holdings (ASX: VAH) has lifted its profit and revenue, with a surge in fare prices delivering a boost.

The group reported its strongest statutory profit after tax in six years, $62.5 million, an improvement of $110.3 million on first half financial year 2015.

Virgin Australia CEO John Borghetti says revenue per seat delivered 'very strong growth'.

"Yield growth was also significant, the result of attracting more corporate and government travellers during the half," he says.

"For Virgin Australia International, RASK growth continued, despite a $19.2 million impact due to volcanic activity in Bali.

"The business remains on track to deliver a profit by the end of the 2017 financial year."

Velocity, Virgin's frequent flyer program, experienced an average daily join rate of almost 2600 members over the period to see its membership grow to 5.7 million and revenue and underlying EBIT margin improve.

Virgin has sustained its lead in domestic on time performance for 15 consecutive months over its 'major competitor'.

Further, Virgin has commanded an ability to charge 9.1 per cent more for the average airfare as it attracts more corporate and government business.

This goes hand in hand with Virgin maintaining a strict discipline on costs, decreasing cost per available seat kilometre (CASK) by 1.5 per cent on the prior corresponding period.

Virgin's international division, impacted by volcanic activity in Bali, experienced a loss again. International underlying EBIT loss was $30.8 million, but this was an improvement on the $39.5 million loss a year earlier.

"Based on current market conditions, all fundamental business metrics are in place for the group to report a profit for the 2016 financial year and deliver a return on invested capital in line with its cost of capital," says Borghetti.

"However, due to current market conditions, we are not able to provide more specific guidance at this time."


Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

How to conduct an effective board assessment: a step-by-step guide
Partner Content
Your directors should conduct a board assessment annually. Let's examine what a boa...
OnBoard
Advertisement

Related Stories

“Lifting up your eyeline”: Lessons on ambition from the founder of a unicorn

“Lifting up your eyeline”: Lessons on ambition from the founder of a unicorn

While today ed-tech Go1 is a 'double unicorn' with a global...

Love is in the wallet: Australians to splurge $485m on Valentine’s Day

Love is in the wallet: Australians to splurge $485m on Valentine’s Day

Vibrant bouquets and sweet treats are high on the agenda for Austra...

Group structure thought starters: How should mine look?

Group structure thought starters: How should mine look?

What does your corporate structure say about you? Does it showcase ...

Administrators kick off sale process for Sun Cable

Administrators kick off sale process for Sun Cable

Administrators FTI Consulting have this week opened up the bidding ...