Virgin Blue posts A$ 158 million pre-tax profit

Australia's low fare airline, Virgin Blue has flown in the face of the global aviation trend by exceeding its targets and announcing a $158 million dollar trading profit before tax for the year ended 31 March 2003.

This represents a three-fold increase on the previous year's trading profit before tax (2002 $47 million) and was achieved during a period in which Virgin Blue developed a truly national network.

Brett Godfrey, Chief Executive of the airline said "Virgin Blue has demonstrated the potential of our low fare model. It is the industry's high-growth sector and it continues to deliver acceptable returns despite challenging operating conditions. While our local competition is Qantas, we benchmark ourselves globally against the leading low cost carriers as they have demonstrated their growing dominance in the short-haul aviation market."

"The travel industry faces a number of uncertainties like the war in Iraq, Bali and SARS. The reality is however that our business has been relatively well insulated from those challenges. Furthermore, the situation overseas has encouraged many Australians to take their holidays closer to home during the past year. As testament to this statement, we continue to deliver on our April forecasts and are on track to meet our profit expectations for the current quarter."

Still, we believe its critical to continue to build up our "war-chest" for unforseen circumstances and therefore, all profits will be reinvested in the airline to allow for future acquisitions or event risk. There are no planned distributions to our shareholders at this time.

In the past year we have continued to focus on opening new routes, offering profitable discount pricing while maintaining our high service standards and on-time performance record. While we do not face the  environment that exists in Europe, for example, with competition from loss making state carriers, charter operators and over a dozen low fare airlines, we are cognisant of the fact that if we lose sight of our low cost focus we risk being surpassed by others in the future."

The airline continues to focus on growing its share of the lucrative corporate travel market. "Our research shows that the business edge for most people is friendly staff, high frequency, on-time performance and  fares that don't damage your bottom line. The corporate traveller is abandoning box lunches and older aircraft, for an airline that has the youngest fleet in the world and the best on-time performance in Australia. Business travellers know that service is defined by how you treat people, not how many amenities you can pile on. For this we thank our 2400 staff who make the difference." Mr Godfrey concluded.

Read: Sir Richard Branson's entire speech praising Virgin Blue