Virgin Atlantic slumps further into the red

 
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VIRGIN Atlantic said yesterday its annual losses have widened to £93m, blaming the Olympics for denting demand for business travel.

The airline’s losses for the year to the end of February were 16 per cent bigger than a year ago, though beneficial one-off items improved group losses to £69.9m.

Revenues rose five per cent to £2.87bn as passenger numbers rose 3.5 per cent to 5.5m and more travellers upgraded to premium economy and upper class.

New chief executive Craig Kreeger, who has been tasked with returning the firm to profit within two years, said in a statement: “Last year saw a double dip recession, a continued weak macro economy, and an Olympic Games which, although a fantastic event, severely dented demand for business travel.

“Despite these challenging circumstances, the enduring strength of the Virgin Atlantic brand has not wavered.”

Kreeger said he was confident the airline’s financial performance would improve “considerably” in 2013-14.

The group made a move into short-haul travel this year with Little Red flights to Scotland and Manchester, and is awaiting regulatory clearance for a tie-up with American giant Delta.

Kreeger said he plans to cut costs by £45m this year.

Earlier yesterday, sister carrier Virgin Australia shocked investors with a profit warning.

The airline, which is listed in Australia and 13 per cent owned by Sir Richard Branson, saw its stock fall by almost a fifth after it said annual profits will be lower than last year.

Many firms in the aviation industry have been hit hard by fuel costs, strike action and low-cost competition in recent years.

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