Virgin Atlantic Reports $ 34 Million Loss for 2018, An Improvement Over 2017

Last week, the British airline Virgin Atlantic announced a loss of 26 million pounds ($ 34 million) for 2018. Although it is still not ideal for the carrier, it represents a significant improvement by compared to its loss of £ 49 million (2017). Company CEO Shai Weiss said weak sterling, Brexit uncertainties and a prolonged shortage of Rolls Royce Trent 1000 engines (used on their 787 aircraft) contributed to the loss.

Positive growth figures

Weiss highlighted several statistics indicating the positive direction taken by the airline:

• 5.8% increase in revenues over the previous year to £ 2.8bn ($ 3.7bn)
• Pbadenger increase of 4.8% over the previous year to 5.4 million
• Capacity increase of 3.5%
• 10.2% increase in the business unit pbadenger number of the upper clbad
• 2.1% increase in premium cabin sales

In addition, the Delta Air Lines joint venture partner – owner of 49% of Virgin Atlantic's share capital – also announced a 13.5% increase in US point-of-sale bookings.

However, the tour operator Virgin Holidays has announced a pre-tax profit of only £ 6 million. This represents a drop of £ 15.5m in 2017 "due to a more moderate consumer demand", which indicates a particularly worrying trend, as the year 2016 recorded a profit of 19.1m £. Weiss, however, noted that Virgin Holidays opened 22 new stores in 2018. This expansion was carried out in partnership with the UK chain of stores Next.

CEO remains optimistic

Weiss is optimistic about this report, calling it "the first year of positive growth since 2014" despite the economic difficulties faced by many UK-based companies. He believes Virgin Atlantic is going in the right direction and praised the level of satisfaction of his team:

"We continued to invest in a host of new initiatives to delight our customers. Now is the time to build on these foundations and our vision of being the most valued travel company. "

"In 2018, we provided state-of-the-art service and unparalleled customer experience. We remained the number one for customer satisfaction across the Atlantic. "

"Even though a loss is disappointing, our performance improved in 2018 despite difficult economic conditions and put us on a growth trajectory and returning to profitability."

2019 will see more growth and change for the airline. In addition to the new routes recently announced, the airline's joint venture with Delta will also include codeshares with Air France-KLM. The fleet will host its first Airbus A350 this summer, with new premium, premium and economical cabins.

Tom Mackay, Chief Financial Officer of Virgin Atlantic, said, "We remain confident and resilient. Economic factors will continue to challenge us over the next year, [but] we are in a strong cash position. "

Only time will tell if these optimistic perspectives turn out to be correct.