Virgin Australia back in the black

Virgin Australia back in the black
By admin

Virgin Australia has pulled itself back into the black, with chief executive John Borghetti pointing to its three-year 'Game Change' strategy for improving its bottom line by more than $90 million.

The carrier today posted a statutory profit after tax of $22.8 million, a major improvement on the 2011 loss of $67.8 million.

Underlying profit before tax came to $82.5 million, up $149.1 million on FY11 as total revenue climbed 19.8% to $3.9 billion. Yield growth across the group hit 12%.

“The group’s improved financial performance throughout the year demonstrates that the Game Change Program strategy is delivering positive results despite the challenging external environment and high fuel prices,” Borghetti said.

A drive to attract lucrative corporate and government customers had been a key factor, he added, with the segment now constituting 20% of domestic revenue.

“Encouragingly, over the last three months, we have averaged above this level,” he said. “Importantly, reaching the 20% target is a tipping point which we believe effectively creates a new competitive norm.”

Borghetti also pointed to expanded interline and codeshare revenue, up 158% on the previous year. The year has seen the airline forge international alliances with Delta, Singapore Airlines and Virgin America while deepening existing alliances with Etihad and Air New Zealand.  On the domestic front, it finalised a deal with regional carrier Skywest in May.

The airline will now enter the “Game On” phase of the three-year strategy, he revealed.

“In this phase, we will introduce further innovative product and service enhancements to establish a superior position in customer experience,” he said. “We will continue to develop our customer research to ensure we anticipate the changing needs of the market in this regard.”

Its Velocity Frquent Flyer program will also be a major focus over the coming year as the airline aims to achieve more than five million members within the next three years

Meanwhile, the strong results have prompted Virgin to accelerate the pace of its infrastructure upgrades including the enhancement of Sydney Airport’s Domestic terminal and the implementation of a wifi system developed by Lufthansa.

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