Virgin Atlantic Airways has announced a £100 million investment in product development as it reported a strong year of trading and a return to profit. Despite the winter closure of London Heathrow and the Ash Cloud crisis costing the business a combined £40 million, strong growth in business traffic and solid load factors across all cabins delivered a good recovery.
Steve Ridgway, Chief Executive of Virgin Atlantic, said: “We have demonstrated the resilience of our business by weathering the toughest economic period for aviation and have now returned the business to profit. A sharp recovery in the first half of the year has been tempered by more challenged trading in the latter period due to increased capacity in the market and high fuel prices.”
20010/11 Full Year Performance:
- Pre-tax operating profit of £18.5m
- Revenues increased by 13% to £2.7b
- Cargo revenue increased by 39% to £224m
- 82% load factor
- Strong year-end cash position of £562m
- New London to Accra route launched
“While 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,” he added. “This year we are investing heavily in new product innovation so that we retain and enhance our leadership in customer service and experience.”
Virgin Holidays also recorded a strong performance driven by high demand for its core Orlando and Caribbean holidays. The company is doubling its UK retail network to 120 stores, creating 200 jobs nationwide.
Quarter 1 2011/12 (1st March to 31st May 2011):
- Total revenue up by 7.6% to £658m
- Two new Airbus A330s introduced on leisure routes
- New Manchester to Las Vegas route launched
Steve Ridgway said: “Since the turn of the year, market conditions have 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. While business traffic remains strong, demand in the Economy cabin is more challenged.”
This year, Virgin Atlantic will be reviewing and updating many aspects of its product offer both in the air and on the ground. The £100 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.