Sydney Morning Herald

Virgin Australia profit takes off as airfares creep up

Sydney Morning Herald logo Sydney Morning Herald 13/02/2019 0:19:00 Patrick Hatch
a large passenger jet sitting on top of a runway: Mr Scurrah will take over the top job on March 25. © BloombergMr Scurrah will take over the top job on March 25.

Virgin Australia's half-year net profit has surged to $74 million, from $4 million last year, as it raised domestic airfares and grew passenger numbers.

The airline said its underlying earnings of $112 million, up 37 per cent, meant its half-year result was the best in 11 years. Total passenger numbers grew 2 per cent in the six months to December 31.

Revenue lifted 10 per cent to $3 billion across the group, as average airfares increased by 6 per cent in the domestic market and 3.4 per cent on international routes.

Virgin's international network made a $2.7 million loss in the half - an improvement from its $12 million loss in the same period the previous year.

But Virgin's budget airline Tigerair Australia ran deeper into the red, widening its losses by 3.6 per cent to $8.3 million, as its passenger numbers fell 9 per cent and revenue stagnated.

Virgin's chief executive John Borghetti said the result showed "our improving profitability aftera significant period of investment and repositioning".

Virgin has booked a full-year loss in each of the past six years after repositioning itself from a being budget airline to becoming a full-service carrier that competes directly with Qantas, sparking a damaging airfare and capacity war with its larger rival.

"We've made solid progress in strengthening the financial foundations of our business," Mr Borghetti said.

The improved result came despite a $88.2 million headwind from higher fuel costs and foreign exchange headwinds.

More to come...

13. helmikuuta 2019 2:19:00 Categories: Nine News Sydney Morning Herald

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