Virgin Blue has posted a full year net loss of A$160 million ($132 million) in line with its "toughest operating environment" since its formation 10 years ago.
The Australian carrier says that it recorded a loss for the 12 months to 30 June, a year after it reported a net profit of A$98 million, despite rising revenues. This is its first annual loss since it was listed in 2003.
Total revenues were up 12.8% at A$2.64 billion, but that was offset by operating expenses increasing by 22% to A$2.67 billion.
The carrier says the rising expenditure was due to higher fuel costs, commissions and marketing costs related to advertising campaigns, and a jump in aircraft ownership costs.
RPKs increased 16% during the year and capacity, as measured by ASKs, was up 19.3%. The passenger load factor was 0.6 percentage points lower at 79.1%.
"While airlines have been variously impacted by the global economic crisis, our approach was to respond swiftly and definitively to softening domestic demand," says Virgin Blue CEO Brett Godfrey. "Key strategies included redeployment of domestic capacity to short-haul international routes, a programme of cost saving and productivity initiatives across the business."
Long-haul subsidiary V Australia, which began operations February, posted a loss before interest and tax of A$124 million, including foreign exchange losses and start-up costs. However, Godfrey defended the decision to go ahead as a "strategic investment for the longer-term".
Virgin Blue said in June that it would raise A$231.4 million in fresh equity, and that Godfrey will leave his post in 2010. Looking ahead, it expects to break even in the new fiscal year.
"Strategic initiatives in the past 12 months, including successful cost savings initiatives, capacity redeployment, the revised V Australia fleet strategy, and the strengthening of Virgin Blue's capital position, have positioned the company to move swiftly to benefit from any economic improvement," says the airline.
Source: Air Transport Intelligence news
