Increase in Business Travellers helps drive Virgin Atlantic's profits higher

 A large increase in the number of business travellers helped Virgin Atlantic to boost profits and achieve record sales in the last financial year.

During the year 2005/06, which ended 28 February 2006, Virgin Atlantic recorded revenues of £1.91 billion, up 17% on the previous year (£1.63 billion). Pre-tax, pre-exceptional profits for Virgin Atlantic Limited, which includes the scheduled airlines Virgin Atlantic Airways and Virgin Nigeria Airways as well as the tour operator Virgin Holidays, more than doubled from £20.1million to £41.6million.

The launch of the new Upper Class Suite helped to attract more premium-paying passengers, with a 10.1% increase in business travellers compared with the year before. A total of 4.9 million travellers chose to fly Virgin Atlantic and Virgin Nigeria, up 11% on the year before (4.4 million).

During the year, Virgin Atlantic Airways also invested heavily in new on-the-ground facilities for business customers, such as the new Clubhouse at London Heathrow, which has already won a string of top design awards. The airline also launched new services to Mumbai, Havana and Nassau. The profits come despite a tougher operating environment, with a 30% increase in fuel costs over the year and continuing overcapacity on some routes, especially between the UK and the North Atlantic.

Virgin Atlantic begins flying between London and Montego Bay, Jamaica from July 3rd 2006 and will be adding a sixth daily service between London and New York from July 1st. The airline will also be starting a second daily service between London and Hong Kong, initially 4 times a week from November 2006, and then daily from February 2007.

In addition, in late 2007, the airline will begin flying to Mauritius in the Indian Ocean, as part of its strategy for expanding the leisure market.

Virgin Atlantic’s staff will also be benefiting from the equivalent of two week’s extra pay, as the 2005/6 profits have triggered a payout of the company Airshare scheme, amounting to an average of £620 for eligible staff. It is the fourth year running that the Airshare scheme has paid out a bonus.

Commenting on the results, Steve Ridgway, Chief Executive of Virgin Atlantic, said, “Virgin Atlantic’s pioneering style of service continues to attract many new travellers. Our award-winning service is encouraging more business travellers to switch from other airlines, while the growing list of destinations we serve is ensuring our leisure travellers keep coming back to Virgin Atlantic. Against the backdrop of higher oil prices and tough competition, our people across the business have helped to deliver another strong performance.”

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