Virgin Atlantic toughs it out to deliver profit

 
Kasmira Jefford
Follow Kasmira
VIRGIN Atlantic bounced back into profit last year despite the disruptions caused by the unusual weather, spiraling rising fuel charges and weak consumer confidence.

The airline, which is 51 per cent owned by Richard Branson’s Virgin Group and 49 per cent owned by Singapore Airlines, made a pre-tax profit of £18.5m in the year through to the end of February, reversing a loss of £132m a year ago.

Revenues for the year rose 13 per cent to £2.7bn whilst revenues for the three months to May were up by 7.6 per cent to £658m, helped by an increase in business travellers.

The closure of Heathrow last winter due to harsh winter conditions and the volcanic ash cloud crisis cost the business a combined £40m.

Chief executive Steve Ridgway said like other airlines, Virgin was struggling with high fuel costs, warning they are unlikely to fall despite the dip in oil prices this week. “It is a massive cost that has to be paid for but at the same time we have to be competitive,” he told City A.M.

Virgin Holidays, the brand’s tour operating business, also announced plans to double the number of stores it owns, creating 200 jobs.

The moves comes at a time when many of its rivals including Thomas Cook have struggled in the face of tough high street conditions.

“It isn’t building bricks and mortar high street stores but working in partnership with some of the big retailers to build these concessions in their shops and that is working extremely well for us,” Ridgeway argued.

He said “there was nothing new to report” on whether the group intends to form an alliance or even merge with other players in the market.