Virgin Australia has posted a net loss after tax of $67.8 million for the 2010-11 financial year, a figure not only in line with its earlier forecasts and a reflection of the impact of the Queensland floods and cyclone natural disasters, but one that masks the fact the airline is confident its ‘Game Change’ strategy is gaining traction.
Highlights of the resulted included a net loss before tax of $66.6 million and a 9.7 per cent increase in revenue to $3.27 billion compared to the previous financial year. Virgin’s international operations (V Australia and Pacific Blue combined) generated earnings before interest and tax (EBIT) of $22.4 million, compared to the domestic operation’s EBIT loss of $40.8 million. But stripping away unrealised foreign exchange losses of $36 million, and a total of $90 million in losses attributed to one-off events (Queensland floods/cyclone – $50m, June’s volcanic ash plume – $7.0m; Christchurch earthquakes – $15.0m; and the Navitare outage and networking restructuring costs of $20.0m), puts the result in a better light.
“Financial year 2011 was a year of enormous challenge and significant change as we began repositioning the company to ensure a more stable financial future. Today’s financial results reflect the impact of an unprecedented series of external events and reinforce the importance of our Game Change Program strategy to increase our share of the more resilient corporate and government markets,” Virgin Australia CEO John Borghetti said.
“Despite the tough operating conditions, we kept our focus on repositioning the airline. Thanks to the outstanding dedication and efforts of our staff and management, over the past 12 months we have redesigned the inflight and ground guest experience, secured a single strong global brand for the entire Group, established a global network with little additional capital expenditure through alliances, and integrated our airline operations to drive efficiencies,” he continued.
Borghetti said early results from the Game Change Program included 29 per cent higher corporate and government market revenues year on year, and a 4.3 per cent increase in yield in June following the introduction of a new fare structure in May.
“We expect to see further gains in the 2012 financial year as we complete the roll-out of our new product offering.”