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IN LIGHT of a challenging environment, Virgin Australia Holdings Limited (ASX: VAH) has reported a statutory loss after tax of $83.7 million for the half year.
VAH claimed its result is largely owing to a combination of low consumer sentiment, economic uncertainty and tough trading and competitive conditions.
CEO John Borghetti says the results reflect the conditions across the entire Australian domestic aviation industry – which saw a first half loss for the first time in 20 years.
However, VAH outperformed its main competitor on growth in total group revenue, domestic yield, international yield and group revenue load factor.
“The industry continues to be impacted by significant capacity growth which occurred during the 2013 financial year, compounded by weak economic conditions and the inability to recover the cost of the Carbon Tax,” says Borghetti.
Regardless, Borghetti remains hopeful for the remainder of the financial year, noting VAH’s further consolidation across key markets and deliverance on key targets.
“We further expanded our regional network (Skywest), worked closely with our joint venture partner Tigerair and enhanced strong partnerships with leading global airlines.
“We also delivered on first-half targets for Velocity Frequent Flyer, global market access and customer experience, and continued to grow our business efficiency program.”
Looking ahead, Borghetti says this program is on track to its $400 million target in cumulative productivity gains for financial year 2015.
Borghetti is focused on the long-term strategy – which includes the five-year Game Change Program – and believes VAH is positioned as an effective competitor in the long-term.
The total VAH cash position stood at $896.6 million, up from $580.5 million at 30 June 2013.
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