- Virgin Australia reveals $355.6 million loss
- 49% of the loss attributed to restructuring and excess capacity
- Trans-Tasman business class from February 2015
Virgin Australia has unveiled a loss of $355.6 million over the 2013-2014 financial year, although restructuring costs of $117.3 million and an 'asset impairment charge' of $56.9 million account for 49% of the overall statutory loss.
The latter is primarily attributed to "excess capacity and competitive pressure in the South East Asian market" and comes on the back of the airline retiring one Airbus A330 aircraft, with a second to follow in due course.
Virgin Australia's underlying loss comes in at $211.7 million, which by nature excludes one-off restructuring and other transformation costs.
“While the current environment remains challenging, the Virgin Australia Group has significantly enhanced its strategic position over the last four years and is well placed to capitalise on market recovery”, said Virgin Australia CEO John Borghetti.
To claw its way back into the black, Virgin Australia will sell 35% of its Velocity Frequent Flyer program to Affinity Equity Partners for $336 million.
When asked about other cost cutting and revenue raising measures that could improve the airline's performance, Borghetti said that Virgin Australia "will be prudent on costs – (both in) removing costs and improving productivity ... but not at the expense of the consumer experience."
The flying public "shouldn't assume that the lowest-paid fare will go through the roof," he added.
Orders for Virgin Australia's Boeing 737 MAX aircraft will also be brought forward from 2019 to 2018 as part of a $1 billion program to reduce operating costs and boost productivity and efficiency.
Business class will also replace premium economy on VA's trans-Tasman and Pacific Island flights from February 2015, and both Perth and Darwin will see new airport lounges in 2015.
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