Profit pickup sees Virgin Australia cancel privatisation plans
By Reuters, February 28 2018
Virgin Australia said on Wednesday it will not go private as it reported first-half underlying profit rose 142.3% due to domestic demand from business and leisure flyers.
Australia's second-biggest airline said last November it was considering going private as it swung to profitability in its first quarter from a loss a year previously and forecast continued improvement in the second and third quarters.
“Following discussions with the major shareholders, the Board has decided not to privatise the company," Chairwoman Elizabeth Bryan said in a statement on Wednesday.
The airline said it expected an improvement in underlying performance in the second half of fiscal 2018.
It reported an underlying profit before tax of A$102.5 million for the six months ended December 31, compared with A$42.3 million last year.
"The improvement was driven by a number of factors including unit revenue and passenger growth, capacity and network optimisation," Chief Executive John Borghetti said.
On a statutory basis, including one-time gains and losses, profit rose to A$4.4 million compared with a A$21.5 million loss a year ago. Revenue rose 6 percent during the period to A$2.79 billion.
Last week, Virgin's larger rival and Australian flag carrier Qantas beat market expectations to post a record first-half profit, largely thanks to fare hikes bringing strong earnings in its domestic business.
Average domestic fares are at the highest in almost a decade, Australian government figures show.
24 Aug 2011
Total posts 1209
Both airlines now have their domestic businesses booming. There is no doubt neither wants to go back to the capacity wars of 2013. Both are managing capacity very tightly and this is showing benefits in RASK.
Qantas - Qantas Frequent Flyer
09 Feb 2015
Total posts 382
Having the major airlines turning a profit is a good on many levels.
Qantas - Qantas Frequent Flyer
28 Jul 2016
Total posts 108
Virgin Australia lack clear direction at the moment... they keep saying and promising stuff that never happens. This and the flight from Perth to Abu Dhabi are prime examples.
28 Feb 2018
Total posts 14
There is plenty of sensible leadership in VA. They have identified the Middle East is flooded and pulled out to focus on the strong Asian Market -clearly paying benefits based on results. I'd say Qantas realised this a bit late given they have pulled out of DXB also.
Qantas - Qantas Frequent Flyer
08 Jul 2015
Total posts 8
Didn’t Virgin Atlantic previously cover SYD-HKG for the Virgin Group - and dropped it as unviable? I know times change but VA are notorious for picking up a route and subsequently dropping it; will be interesting to see the how long this one lasts.
Qantas - Qantas Frequent Flyer
04 Nov 2017
Total posts 325
Virgin Atlantic and Virgin Australia are operationally separate identities.
Also Virgin Group only owns 10% of Virgin Australia those days, with the "Big 4 - Etihad, Singapore, HNA and Nanshan" running the show there those days.
23 Oct 2014
Total posts 235
Virgin Atlantic operated a 4 engine A340 on a sub 10hr sector HK-SY, designed to make money on 13-15hr flights, it was also beyond their home country of residence (UK).
29 Aug 2013
Total posts 57
This has nothing to do with profit and everything to do with VA not being able to work out how to go private with the current owners and retain the international traffic rights. How they do it now is questionable at best.
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