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DALLAS - Virgin Atlantic (VS) has revealed that it does not expect to make a profit this year after continued rising costs offset any financial improvement brought by a surge in travel demand.
The news came after the London-based carrier released its annual financial results for the year ending December 31, 2022. VS announced total revenue of £2.9bn, back to 98% of pre-pandemic revenues. However, a loss of £206m (US$260m) was posted before tax and exceptional items.
This was assisted by passenger capacity (ASKs) increasing 178% against 2021 levels, with passenger numbers rising 297% vs 2021 numbers. During the year, VS operated 21,835 sectors, an increase of 61 against 2021 and 93% against 2019 levels.
Survival Ensured
Speaking of the results, CEO Shai Weiss said, “Belief, determination, and conviction ensured our survival. In 2022, it allowed us to move into recovery by proving that our plan is working. In 2023, it is propelling us into our year of delivery, when we deliver for our people and our customers, ensuring everyone can take on the world, driven by the vision of becoming the most loved travel company and sustainably profitable.”
Its results were also buoyed by an increase in bookings through its Virgin Atlantic Holidays unit. It revealed that 250K customers helped generate revenues of £487m, sitting around 78% of 2019 levels.
Virgin Atlantic Cargo also surpassed expectations delivering revenues of £377m, 75% above 2019 numbers on 1,117 cargo-dedicated sectors.
Profits Remain Elusive
Profits have proven elusive for Virgin Atlantic even before the pandemic. For several years the airline has been focusing on cost-cutting and last year, it recorded non-fuel costs of £1.5bn, down £173m on 2019 levels.
Oli Byers, VS CFO, explained, “To deliver sustainable profitability requires a continuous focus on capacity and cost discipline. In 2022 we maintained this focus, realising the benefit from £300m in annual cost savings alongside improving our fleet utilisation. 2023 is set to deliver more flown sectors vs 2019 with four fewer aircraft.
“2023 will be a year of delivery as we build on the successful recovery achieved in 2022. We have cause for optimism as demand for travel has remained strong through the first quarter of 2023 balanced with continued macro-economic uncertainty. We anticipate growing underlying EBITDA in 2023 and are on track to return to profitability in 2024.”
https://airwaysmag.com/virgin-atlantic-confirms-skyteam-alliance/
Featured Image: Virgin Atlantic A333 G-VSFO at MAN. Photo: Daniel Crawford/Airways.
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