Virgin Atlantic looses £48m as troubles hit revenue

Virgin Atlantic posted a loss of £48m after making profits of £187m the previous year.

Increased competition on key New York routes, a volatile currency exchange between the US dollar and U.K. pound, and increasing fuel costs all played their part.

While profits were hit, the fall into loss seems to have come from having to lease additional aircraft and buy back an A346. These costs are laid at the door of Rolls Royce who’s Trent-1000 engines have grounded Virgin’s 787-9’s, three at any given time.

The airline also cut capacity by 2.2% and utilisation fell by 100,000 passengers across the year.

The airline was disappointed in its results, but is looking long term.

Virgin pricing on key routes is also no longer very competitive, the airline is more a choice than a competitor when it comes to long haul.

Spot checks on pricing for example showed that BA were offering return seats to SFO in business class for £100 less than Virgin was offering Premium Economy.

The move not to match pricing has been ongoing for some time, with the airline looking to its improved service and catering offerings to hold a preferred position in customers minds.

Quite how long that can viably sustain itself depends on the loyalty of Virgin Atlantic customers and its ability to attract new passengers in a low- cost driven market.

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