Virgin Atlantic, which almost died during the pandemic in 2009, says that it will achieve record profits this year when passenger numbers return to pre-Covid levels.
The Heathrow carrier, owned by Virgin Group of Sir Richard Branson and Delta Air Lines in the US, returned to profitability by 2023, but the heavy debts it had to take on to survive pandemic still make the company heavily loss-making.
Oli Byers is the airline’s Finance Director. He reported strong demand for outbound travel from the UK to Caribbean during the winter. This market has traditionally been a sweet spot, with Virgin passengers spending a bit more money on their holiday.
The carrier has also seen strong growth in the Maldives, Dubai and the United States.
With its newfound confidence, the airline will double down on their passage to India. The airline is also adding a daily second flight to Mumbai to its double-daily services to Delhi, and daily flights from Bengaluru. Virgin Atlantic, facing stiff competition from British Airways, Air India and Gulf carriers that connect via their home airports in London, will soon fly one million seats per year to the Sub-Continent, or around 13 percent of its total flying schedule.
Virgin Atlantic has reported record revenues for 2023 of £3.1 billion, compared with £2.9 billion the previous year. Virgin Atlantic’s passenger numbers are still 10 percent lower than pre-pandemic levels, at 5.3 millions. Corporate travellers are also down more than 20%.
The operating profit was £80 million, a significant improvement over the £72 millions in 2019.
In 2022, the company incurred a loss of £206 million. This was due to the increased cost of interest rates for servicing its £3.1billion debt. In 2019, the bottom-line loss was £63million.
Byers predicted that by 2024, passenger numbers will return to the pre-Covid level of 6 million, as its fleet reaches 45 aircraft and revenues reach new records.
He said that Virgin would be able to double its all-time operating profit record from £100 million (in 1999) to £200 million. This should bring Virgin back into the black, pre-tax.
Virgin, which left Gatwick in the summer of 2012 and created a huge hole in its long-haul service there, has increased from 24 to 34 pairs of slots for take-offs and landings at Heathrow and plans to “opportunistically acquire” more. Virgin is in discussions with Heathrow’s management about a better way to showcase its airline than the current Terminal 3 location.
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