Virgin back in profit despite stiff headwinds

Virgin Atlantic returned to cruising speed yesterday as the airline's finances soared back into the black despite taking a £40m hit from the ash cloud and winter cold snap.

The carrier, which is still majority owned by Sir Richard Branson, reported pre-tax profits of £18.5m over the year to the end of March, with revenues up by 13 per cent to £2.7bn. The previous year, the group slumped £132m into the red as the credit crunch and the subsequent recession wreaked havoc in the aviation industry.

The upbeat figures came the day after Virgin Atlantic finally did a deal with its pilots to avert strike action threatened for months in a dispute over pay and conditions.

Virgin Atlantic chief executive Steve Ridgway was bullish yesterday. "We have demonstrated the resilience of our business by weathering the toughest economic period for aviation and have now returned the business to profit," he said.

The momentum is continuing, the airline added. In the most recent quarter – the three months to the end of May – Virgin Atlantic has introduced two new Airbus A330s and also launched a new route from Manchester to Las Vegas.

Revenues for the quarter rose by 7.6 per cent to £658m, the group said.

However, Mr Ridgway warned of tougher trading conditions ahead as the global economic outlook continued to darken. "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," he said last night.

Virgin Atlantic is not the only carrier to be feeling the pinch. Air France and Lufthansa both recently published financial results hit by spiralling oil prices, while US carrier Delta admitted its fuel bill was outpacing its revenue growth.

That said, Virgin Atlantic is going ahead with plans to invest £100m in the business over the months ahead. The investment programme includes plans to buy new Airbus A330 aircraft, launch additional services to the Caribbean and Ghana, and create 1,000 jobs. The group is also doubling the size of its Virgin Holiday retail chain, creating another 200 jobs as the network of stores expands to 120 outlets.

"Whilst we have been very focused on trading the airline back to profitability, we have worked hard to introduce new aircraft, new routes and extrarotations to the existing network where there has been high demand," Mr Ridgway said.

Following this week's deal with the pilots' trade union, Virgin Atlantic will now undertake a major recruitment drive to up both cabin crews and pilot numbers. Some 63 per cent of Virgin Atlantic members of the British Airline Pilots Association this week voted in favour of a settlement of the dispute, in response to an improved offer from management including a profit-sharing scheme and a review of working conditions.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

MBDA UK Ltd: Indirect Procurement Category Manager

Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

Recruitment Genius: Web Developer - PHP

£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...

Day In a Page

Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness
Homeless Veterans appeal: Homeless in Wales can find inspiration from Daniel’s story

Homeless Veterans appeal

Homeless in Wales can find inspiration from Daniel’s story
Front National family feud? Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks

Front National family feud?

Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks
Pot of gold: tasting the world’s most expensive tea

Pot of gold

Tasting the world’s most expensive tea
10 best wildlife-watching experiences: From hen harriers to porpoises

From hen harriers to porpoises: 10 best wildlife-watching experiences

While many of Britain's birds have flown south for the winter, it's still a great time to get outside for a spot of twitching
Nick Easter: 'I don’t want just to hold tackle bags, I want to be out there'

'I don’t want just to hold tackle bags, I want to be out there'

Nick Easter targeting World Cup place after England recall
DSK, Dodo the Pimp, and the Carlton Hotel

The inside track on France's trial of the year

Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
As provocative now as they ever were

Sarah Kane season

Why her plays are as provocative now as when they were written
Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

Murder of Japanese hostage has grim echoes of another killing

Japanese mood was against what was seen as irresponsible trips to a vicious war zone
Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore