10 AUSTRALIAN AVIATION DECEMBER 2017Blue skies ahead?
Virgin Australia posts second consecutive quarterly profit, provides upbeat outlook, confirms management changes
V
irgin Australia has posted a
second consecutive quarter of
underlying profit and expects
further improvement over
the next six months as its
transformation program supports an
improved bottom line.
The airline Group achieved
underlying profit before tax (PBT)
in the vicinity of $14.4 million for
the three months to September 30
2017, a turnaround of $18 million
from an underlying before tax
loss of $3.6 million in the prior
corresponding period.
The positive result for the first
quarter of 2017/18 announced in
a trading update to the Australian
Securities Exchange (ASX) on
November 8 followed a profitable
fourth quarter of 2016/17, again atthe underlying PBT level.
And in terms of the outlook,
the company has guided the
market to expecting an improved
performance in the second
and third quarters of 2017/18,
compared with the prior
corresponding quarters in 2016/17.
“This would represent four
consecutive quarters of underlying
performance improvement for the
group,” Virgin Australia chief
executive John Borghetti told
shareholders at the company’s
annual general meeting in
Brisbane.
In August, Virgin Australia
reported a statutory after tax
loss of $220.3 million for the
12 months to June 30 2017. The
airline Group said at the time theresult was impacted by a subdued
domestic market and one-off
charges as it withdrew 18 Embraer
E190 regional jets and eight ATR
turboprops from the fleet.
Virgin Australia is in the middle
of its three-year transformation
program (dubbed “Better
Business”) that is targeting
$350 million in annual savings
by the end of 2018/19 through
fleet simplification, operational
efficiencies and other measures.
The company has also sought
to bolster its balance sheet through
paying down debt and boosting free
cash flow.
“The Better Business program
continues to track ahead of
schedule,” Borghetti said.
Virgin Australia’s tradingupdate said revenue improved
5.7 per cent in the first quarter,
compared with the prior
corresponding period.
Meanwhile, Virgin Australia’s
domestic network grew revenue per
available seat kilometre (RASK)
8.8 per cent, while load factors
rose 3.8 percentage points to 81.
per cent as capacity, measured by
available seat kilometres (ASKs),
fell 3.3 per cent.
“We are managing capacity
prudently,” Borghetti told reporters
during a conference call following
the conclusion of the AGM.
On the international front,
Virgin Australia’s overseas flying
experienced a 17.7 per cent jump
in ASKs as new Airbus A330-
flights between MelbourneNews from
across Australian