Craig Kreeger’s turn-around programme begins to take shape as lossses fall to £51m in year to December 2013.
Losses at Virgin Atlantic halved in the year to December 2013 as new chief executive Craig Kreeger’s turn-around programme began to take shape.
The Virgin Group-controlled airline, which celebrates its 30th anniversary this year, made a pre-tax loss of £51m in the 12 months to December.
Direct comparison for the prior year is made difficult due to a change in year-end – from February to December, bringing it in line with Virgin Group – but in the same period a year ago the loss was £102m on a pro-forma basis.
The last reported annual loss – for the 12 months to February 2013 – was £128.4m before exceptionals.
The airline emphasised that on a 10 month basis, from March to December 2013, the airline was profitable – before tax and exceptional items – to the tune of £7m.
Mr Kreeger said the airline made “good progress” last year and was on track to reach profitbality by the end of this year.
He arrived at the airline in February 2013, taking over from long-standing chief Steve Ridgway, since which time he has focused on cutting below-the-wing costs, launching Virgin’s UK domestic service Little Red, and bringing the airline closer to Delta Airlines.
Delta bought a 49pc stake in Virgin Atlantic for $360m (£214m) from Singapore Airlines in December 2012.
The tie-up received regulatory approval last September, since which time the two airlines have begun to co-operate, the most visible example of which has to date has been Delta’s move to Terminal 3 – from Terminal 4 – at London’s Heathrow airport.
The joint venture is designed to bolster the profitability of both airlines by working together on trans-Atlantic and other routes.
“Going forward, the impact from our Delta relationship, which greatly enhances our revenue opportunities in the US…means we are confident that we will deliver on our target and return to profitability,” Mr Kreeger continued.
The annual results also show that group turnover rose by 4.9pc in the year to December, including an increase in passenger revenue of £153m.
Some 6.2m passengers were flown by the airline in the year, including on its loss-making Little Red service which flies passengers between Manchester, Edinburgh, Aberdeen and Heathrow.
The airline’s results include the figures for Virgin Atlantic Cargo, where sales fell 3.4pc as a result of a weak cargo market, and Virgin Holidays, which generated undisclosed profits on the back of an 8.1pc increase in revenue.