Virgin annual loss set to shrink to $93.8m

In a curtain raiser to its full financial years result to 30 June Virgin Australia has this morning filed greatly improved fourth quarter results.

Virgin will not release its full annual results figures until August 7.

The Flying Kangaroo is expected to flag an underlying pre-tax profit close to $1 billion million for the same period when the airline opens its books on the 2015 financial year on August 20.

The figure, included in the group’s fourth quarter trading update, is an improvement on the $355.6 million the airline lost in 2013/14.

Australia’s second largest carrier booked a net loss of $93.8 million, narrowing from a loss of $355.6 million the year before.

The filing to the ASX can be found in full here.

The result has been aided by a stronger performance from Tigerair and after a period of lowering non-fuel costs.

The airline has also benefited from a sharp fall in oil prices during the past year due to an oversupply in the market.

Virgin moved to quarterly reporting of its financial results to be in line with one of its major shareholders Singapore Airlines (SIA). However, the improvement in the domestic market was enough to allow it to report an overall rise in yields.

The underlying loss for the fourth quarter was $36.9 million, down from $83.1 million in the prior corresponding quarter.

Tigerair, which only flies domestically in Australia but was expected to be used on worldwide short-haul routes at some point in the future, posted a 3.2 per cent increase in passenger numbers in the fourth quarter, resulting in load factors rising 4.7 per cent to 82.4 per cent. Capacity, as measured by available seat kilometres, rose 6.8 per cent.

“This result was driven by continued improvement in unit revenues and cost efficiencies”, Virgin said. “We note underlying macro-economic conditions still remain weak and any pickup in underlying demand may take time primarily due to weakness in the resources sector as sites shift from construction to production phase and leisure demand still impacted by cautious consumer spending”.