Business Travellers help to lift Profits for Virgin Atlantic

Virgin Atlantic’s Premium passenger numbers rose by 22% in 2007/08 helping the airline to boost its annual profits. Pretax profits before exceptional items rose 38%, from £44million to £60.9million. Group sales, including tour operator Virgin Holidays, rose 9.1% to £2.336billion.

Pretax profits increased from £6million to £34.8million and retained profits for the year were £47.7million, up from £6.6million. Virgin Atlantic’s cash position remained strong, with nearly £600m in the bank at the end of the financial year. Cash reserves have continued to build and were £838m at the end of June 2008.

The total number of passengers carried during the year increased by 7.6%, to 5.7 million, as Virgin Atlantic expanded the number of destinations it serves around the world to 30. New routes launched during the last year included London Heathrow to Chicago, Nairobi and Mauritius, as well as Gatwick to Kingston.

The annual profits trigger a bonus payout to staff, who each receive the equivalent of one and a half week’s extra pay. 10% of the group’s profits is shared among staff.

Following on from the good results for 2007/08, Virgin Atlantic has had a strong start to its current financial year, with pretax profits in the first quarter of 2008/09 up to £23.5 million. Sales were up 16% to £645.3million, from £558million in the same period the year before. Load factors in the first quarter were 77%, up from 74.8%.

Steve Ridgway, Chief Executive of Virgin Atlantic, said, "While the outlook remains pretty overcast for the aviation industry, the winners will be those airlines that focus on offering the best customer service and which are nimble enough to take advantage of the opportunities that lie ahead. Our strategy of slowing our growth has paid off in time for the slowdown in the industry. Against the backdrop of high oil prices and weakening consumer demand, we are well-placed to succeed over the coming months. We have diversified our route network, focused on providing the best product in Upper Class, Premium Economy and Economy, hedged our fuel purchasing and built up a strong cash position."

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