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Britain's Virgin Atlantic is seeing bumper summer ticket sales, driven by stronger-than-expected premium leisure travel, but rising costs mean it still won't make a profit this year.
Virgin's 2022 results, published on Wednesday, showed the transatlantic-focused airline's recovery from COVID-19, which it only narrowly survived. Revenues recovered to 98% of 2019 levels and it reported a pretax loss before exceptional items of 206 million pounds ($259.99 million).
But the airline warned it would not return to profit until 2024, having previously forecast it would be profitable this year.
Even before COVID-19, Virgin, co-owned by founder Richard Branson through his Virgin Group and Delta Air Lines, struggled, recording a loss for each of the three years before the pandemic.
Chief Financial Officer Oliver Byers said the impact of persistently high inflation, a weaker-than-expected pound and the rapid increase in interest rates it pays on its COVID-related debts would keep it in the red, despite soaring demand and cost savings made during COVID.
There were no plans for more cost-cutting, Byers said, adding that a current growth plan runs to 2025.
"We're actually very, very encouraged by particularly the summer, but also by the second half," he said of future bookings, highlighting Virgin's key UK to U.S. markets, a boost from the coronation and a new route to the Maldives.
That tallies with updates from European airlines including British Airways-owner IAG, Lufthansa and Air France-KLM , which have all pointed to robust bookings, showing consumers prioritising travel spend despite high inflation.
Back in 2021, Virgin was rumoured to be considering floating on the London Stock Exchange, but Byers said that was not on the cards and its shareholders were supportive of the current strategy.
"We've got no plans right now to look at that," he said.
($1 = 0.7923 pounds) ($1 = 0.7923 pounds) (Reporting by Sarah Young; Editing by Kate Holton and Sharon Singleton)