Sir Richard Branson's airline group, Virgin Atlantic, which is embroiled in a fresh scandal with British Airways over alleged price-fixing, reported a doubling in profits yesterday.
The group, which includes the main long-haul airline as well as Virgin Holidays and Virgin Nigeria Airways, made a pre-tax pre-exceptional profit of £41.6m in the year to the end of February on revenues of £1.9bn compared with a profit of £20.1m in the previous 12 months. However, Virgin's operating margin, at just 2.2 per cent, remains a long way short of BA's, which climbed to 8.3 per cent last year.
The surge in profits came despite a 30 per cent rise in fuel costs to £378m and a £100m overhaul of Virgin's Upper Class service, and triggered a payout to staff averaging £620.
Steve Ridgway, Virgin Atlantic's chief executive, said overall passenger numbers were 11 per cent higher at 4.9 million, while premium passenger numbers were up by 10 per cent.
The airline expects fuel costs to rise to about £500m this year because of increasing oil prices and a reduced capacity for hedging. But this also reflects the airline's continue expansion which will see another 600 to 700 staff hired this year, taking the workforce to about 9,500. Virgin is increasing services to destinations such as New York and Hong Kong and launching new routes, and will take delivery of a further seven long-range Airbus A340-600 jets.
Mr Ridgway declined to comment on the inquiry into alleged fixing of airline fuel surcharges by the Office of Fair Trading and US Department of Justice. The investigation, which has led to two senior BA executives being placed on leave of absence, was triggered after Virgin contacted the OFT about approaches it had received from BA.
Virgin and BA introduced fuel surcharges two years ago within a week of each other and both currently levy the same £35 one-way charge on long-haul flights.Reuse content