Caribbean helps Virgin Atlantic return to profit
The UK airline says routes to the Caribbean made a significant contribution to boosting revenues and profits.
LONDON, United Kingdom, Thursday August 11, 2011 – Virgin Atlantic has reported a strong year of trading and a return to profit, thanks in part to its Caribbean routes.
Despite the winter closure of London Heathrow and the ash cloud crisis costing the business a combined £40 million (US$64.5 million), strong growth in business traffic and solid load factors delivered a good recovery for the UK-based carrier.
The airline said its routes to the Caribbean remained popular, with a total load factor of 83 percent, with Barbados a particularly strong performer.
“Virgin Atlantic in the Caribbean has made a positive contribution to the overall 2010/11 results, performing well in very tough economic conditions,” said Regional Manager for the Caribbean Nick Parker.
“We are particularly pleased with our results in Barbados, which has out-performed all other islands with a 10 percent year on year growth. The first quarter this year is proving to be a challenge, but we remain cautiously optimistic.”
The overall 2010/11 performance includes: pre-tax operating profit of £18.5 million (US$29.8 million); a 13 percent increase in revenues to £2.7 billion (US$4.3 billion); cargo revenue increased by 39 percent to £224 million (US$361.7 million); an 82 percent load factor; and strong yearend cash position of £562 million (US$907.6 million).
Chief Executive of Virgin Atlantic Steve Ridgway said that since the turn of the year, market conditions had become tougher with increased capacity, faltering consumer confidence and high fuel prices.
“We are also seeing softer trading in the areas that are hit hardest by the continued rises in Air Passenger Duty, particularly the Caribbean routes and Premium Economy cabins. Whilst business traffic remains strong, demand in the economy cabin is more challenged,” he said.
This year, Virgin Atlantic will be reviewing and updating several aspects of its product offer both in the air and on the ground. A £100 million (US$161.5 million) investment, the arrival of new Airbus A330 aircraft and additional services to the Caribbean and Ghana will create 1,000 jobs across the airline including major recruitment drives for cabin crew and pilots.
“Whilst we have been very focused on trading the airline back to profitability, we have worked hard to introduce new aircraft, new routes and extra rotations to the existing network where there has been high demand,” Ridgway said. “This year we are investing heavily in new product innovation so that we retain and enhance our leadership in customer service and experience.”