Virgin Australia suffers loss due to restructuring

Virgin Australia suffers loss due to restructuring

Virgin Australia suffered a full year loss of A$225 million following a restructuring of the business and fleet.

The vast bulk of the loss came from A$440.5 million in restructuring costs as well removing two types of regional aircraft from the fleet.

However, the underlying profit for the year to June 30 - excluding significant one-off items - was reported at A$41 million, an improvement of $90.1 million improvement on the previous 12 months.

Overall group revenue increased by 5.7% to A$5.02 billion but the airline’s international operations incurred a loss of A$48.8 million.

The international business is on track to move into the black by the end of the 2017 financial year following the withdrawal of some flights between Australian cities and Bali and between Perth and Phuket. 

Low cost arm Tigerair Australia made its first full year profit of A$2.2 million, one year ahead of schedule.

Virgin Australia chief executive John Borghetti said: "These results were delivered in a challenging operating environment affected by subdued consumer demand, the downturn of the resources sector and uncertainty around the economy and political events.

"Strategic capacity reductions were made in line with reduced demand, particularly on regional routes."

He added: “Based on current business performance, the group’s positive momentum is expected to continue. However, due to market uncertainty, we are unable to provide further detail at this time.”


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