Virgin looks to cut costs to get back to profit
Virgin Atlantic is looking to make £45 million in cost savings to help it return to profit in two years.
The airline outlined its turnaround strategy as it reported a loss of £93 million, up from £80 million last year.
But, thanks to a one-off exceptional item and a profit at its tour operator Virgin Holidays, Virgin Group pre-tax loss was down at just under £70 million.
Revenue increased by 5% to £2.87bn and airline load factors were up by 1.3% to 79%.
Passenger numbers grew by 188,000 to 5.5 million.
Chief executive Craig Kreeger blamed the double dip recession, a continued weak macro economy, and the Olympic Games which "severely dented demand for business travel".
"Virgin Atlantic has a programme of measures going forward which I am confident will improve our financial performance considerably in 2013/14 and put us firmly on the road to a return to profit in spring 2015," he said.
The cost savings will focus on non-customer facing back-office operations, including IT systems and e-commerce.
A spokeswoman said it had, for example, forecast an £8 million saving in fuel due to a new software system being implemented.
She said the airline was also looking at departments across the business to "maximise working practices" but stressed that there are no widespread redundancies planned
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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