VIRGIN ATLANTIC GROUP SLIPS TO
£ 80. 2 MILLION FY2011-12 OPERATING LOSS
The UK’s Virgin Atlantic Group, which includes Virgin
Atlantic Airways (VS), recorded an operating loss of
£ 80. 2 million ($120.3 million) for the 2011-12 financial
year, compared to an £ 18. 5 million operating profit for
the preceding year.
Revenues increased 3% to £ 2. 74 billion at the Group,
which traditionally does not separate out figures for
the airline and releases limited financial information.
Load factor was down around 2% at 78%, due to a
6% increase in capacity, according to a spokesperson.
Cargo revenue was up 7% at £239.6 million.
“In an incredibly challenging market, we have managed
to grow top line revenues and fly more customers than
last year,” VS CEO Steve Ridgway said. “However,
with the prevailing uncertainty in the economy, sky-high fuel prices and a 25% hike in our air passenger
duty fees, converting this sales growth into profit has
not been possible.”
A renewed cost-reduction drive is underway, which
aims to reduce operating costs by £ 50 million in the
“We have had an encouraging start to the year, con-
IAG planning Iberia restructuring
tinuing to grow our passenger numbers and our rev-
enue,” Ridgway said.
Sharply increased half-year losses at International
Consolidated Airlines Group
(IAG) have led chief executive Willie Walsh to warn of
imminent major restructuring
at subsidiary Iberia (IB) to
correct “deep and structural”
problems. Redundancies were
inevitable, he said.
IAG, which comprises IB
and British Airways (BA),
slumped to an operating loss
of €253 million ($312 million)
before exceptional items for
the six-month period ending
June 30, compared to a profit
of €88 million for the same
period last year.
After-tax figures showed a
loss of €231 million compared
to a profit of € 71 million year-over-year. Revenue increased
9.8% to € 8. 53 billion. Fuel
costs were up 25%.
BA reported a half-year
operating profit, after exceptional items, of € 13 million;
IB posted an operating loss of
“There remains a stark dif-
ference in the performance of
“Iberia’s problems are deep
and structural and the eco-
nomic environment reinforces
the need for permanent struc-
tural change. We are currently
working on a restructuring plan
for Iberia which we anticipate
will be finalized by the end of
September,” Walsh said, add-
ing it is likely to include “short-
term downsizing, network
reshaping to deliver higher unit
revenues and a re-evaluation
of all aspects of the business to
deliver competitive costs and
service to enable long-term
IB’s new low-cost subsid-
iary Iberia Express, has been
profitable in its third full month
of operation in June and has
established an “exemplary
operating performance from
Madrid Barajas,” Walsh said.
Integration of British Midlands
International into BA accounted
for most of the € 38 million of
exceptional items. Completion is
due by year end, IAG said.
For the second quarter, IAG
posted an operating loss of
€ 4 million, before exceptional
items, compared to an operating profit €190 million in the
ANA reverses losses in fiscal 1Q helped by strong performance
Japan’s All Nippon Airways
(ANA) has reported a fiscal
first-quarter net profit of ¥0.6
billion ($7.54 million), reversed
from a net loss of ¥ 8. 4 billion
in the year-ago period.
Operating revenue rose
12.5% to ¥343.1 billion as
Japan recovered from last
year’s tsunami disaster at
Fukushima and the strong yen
made overseas travel more
affordable, ANA said in a
statement. ANA’s first report-
ing period for fiscal year 2012
runs from April 1-June 30.
income reached ¥ 11 billion
compared to a loss of ¥ 8. 1 billion in the previous year.
“Passenger revenues and
numbers grew on both domes-
tic and international services
compared with the same peri-
od in 2011 when demand was
significantly affected by the
Great East Japan Earthquake,”
ANA said in a statement.
Passenger revenue rose by
¥ 14. 6 billion, an increase of
10.9% compared to a year earlier, and load factor increased by
4. 6 percentage points to 58.2%.
In our July issue, page 64, we
said that Japan Airlines exited
bankruptcy in March 2012; JAL
exited bankruptcy in March
In our August issue, page
61, ANA traffic figures for May
omitted domestic passenger
numbers. ANA’s total number
of passengers for the month
was 3. 65 million, of which 3. 1
million was domestic traffic.
; Receive detailed reports for all travel
; Centralize billing and improve cost controls
TM Powering Travel Payment
; Manage corporate spend in less time
; Reduce T&E spending through better compliance of policies