Virgin Atlantic posts better than expected profits

Virgin Atlantic today published its audited accounts for the year ended April 2003 which show that it made a pre tax profit of £15.7m - a turnaround of £108.3m compared with the previous year.

The results cover the activities of the airline and its holidays and cargo operations. The outline of these results was previously announced in unaudited form on 5 May. The trading environment during the financial year was extremely challenging as a result of the combination of global downturn, terrorist activity in the Far East and Africa, the war in the Middle East, culminating in the impact of SARS in Asia.

Sir Richard Branson, Chairman of Virgin Atlantic, said:

"Despite having almost every imaginable obstacle thrown at us I'm immensely proud that our team at Virgin Atlantic made a profit before exceptional items and tax of £48.7m and a profit of £15.7m before tax. This is a fantastic achievement on the part of the staff and management teams of the various Virgin Atlantic Group companies.

"Their success has been achieved in the face of testing market conditions and is a result of our strong load factors, which now even exceed those of low cost operators. Good performances by our cargo and holiday businesses and a tight control of costs also helped all Virgin Atlantic Group activities."

During the financial year Virgin Atlantic took delivery as launch customer of four new Airbus A340-600 aircraft and opened its first hangar at London Heathrow, the only one in the UK capable of handling new generation aircraft such as the A340-600. In February 2003 Virgin launched a new service to the oil capital of Nigeria - Port Harcourt. In May 2003, new services were launched to Grenada and Tobago which formed part of a 60% expansion of capacity to the Caribbean.

Sir Richard Branson also commented on the year ahead:

"Things will remain tough in our industry for some time but I know that our staff will continue to deliver the best service to our customers which is all aimed at achieving another profitable performance in the current financial year.

"We will maintain profitability by continuing to invest in our people, product and growth. Our fantastic staff will share a bonus of almost £5m as a result of last year's performance. We've recently announced a £50m investment in our revolutionary new Upper Class Suite - a first class product which we'll sell at a business class fare.

"Our passengers want us to add more capacity on existing routes to Asia and Africa and add new routes such as Australia and further Caribbean destinations. To provide for this growth we'll be taking delivery of three more Airbus A340-600s and a further Boeing 747-400 this financial year. We have orders in the pipeline for three more A340-600s and six Airbus A380s and are now talking to both manufacturers about acquiring more planes."