Virgin Australia loss to narrow to $94m

Virgin Australia loss to narrow to $94m

Virgin Australia is on track to improve its bottom line by more than $260 million, but is still expected to post a near $94 million full year loss.

The airline is yet to release its full year results, but figures included in the airline’s latest quarterly trading update show Virgin made a net loss of $93.8 million for 2014/15.

That’s an improvement on the $355.6 million the company lost in the 2013/14 financial year.

On an underlying basis, which excludes one-off items, the group is on track to post a $49 million loss, which is better than the $65 million loss analysts had expected, but well below the near $1 billion profit rival Qantas is expected to post.

The group, which will release its full year results on August 7, made an underlying loss of $36.9 million for the June quarter, which compares to a $46.2 million loss for the same period a year ago.

The group’s Tigerair Australia subsidiary recorded an underlying loss of $9.8 million loss during the quarter, an improvement on the $25.6 million it lost during the prior corresponding period.

Chief financial officer Sankar Narayan said the airline’s performance was continuing to improve due to efforts to cut costs and lift yields by targeting the lucrative business traveller market.

“The result represents a significant year-on-year improvement in performance for the seasonally weaker June quarter and we expect to see a continued positive trajectory,” he said in a statement.

“The key highlights in this result have been our performance on non-fuel costs, success in attracting high yielding market segments and the improved performance of Tigerair Australia.”

The airline has also benefited from a sharp fall in oil prices during the past year due to an oversupply in the market.

Virgin Australia shares were half a cent higher at 45 cents as of 1043 AEST.

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