Like The Herald Business Journal on Facebook!
The Herald of Everett, Washington

The top local business stories in your email

Contact Us:

Josh O'Connor
Phone: 425-339-3007

Jody Knoblich
General Sales Manager
Phone: 425-339-3445
Fax: 425-339-3049

Jim Davis
Phone: 425-339-3097

Site address:
1800 41st Street, S-300,
Everett, WA 98203

Mailing address:
P.O. Box 930
Everett, WA 98206

HBJ RSS feeds

Virgin Australia posts $88 million loss

SHARE: facebook Twitter icon Linkedin icon Google+ icon Email icon |  PRINTER-FRIENDLY  |  COMMENTS
Associated Press
SYDNEY -- Major shareholders in Virgin Australia Holdings Ltd., the country's No. 2 airline, have provided it with a line of credit after the carrier Friday reported a U.S. $88 million annual loss.
The loss for the year ended June 30 was a reversal from an AU $22.8 million profit the previous year. The result was in line with the company's guidance for a loss between AU $95 million and AU $110 million. The company said a difficult economy, competition with Australian flag carrier Qantas Airways Ltd. and a carbon tax was to blame.
Virgin's major shareholders have provided the airline with an AU $90 million loan facility to ease any concerns it doesn't have enough cash to support its daily operations. Air New Zealand, Etihad Airways and Singapore Airlines are each separately providing funding, with a one year loan term.
Virgin chief executive John Borghetti would not provide profit guidance for the current fiscal year, given the uncertain economic environment. But he said the company had managed to reduce costs by more than AU $60 million and that the latest year was a pivotal one for the airline.
"We completed our major restructuring and transformation program, and reshaped the competitive landscape of the Australian aviation market, despite a very difficult economic environment and intense competition," he said.
Stripping out one-off time and the recently acquired Skywest domestic airline, the underlying pre-tax loss was AU $72.8 million, down from AU $82.5 million profit in the previous year.
Revenue increased 2.6 percent to AU $4 billion, compared with a 20 percent jump recorded the year before. Net operating expenses rose 7 percent to AU $4.12 billion.
The company said it had been unable to recover AU $48 million that it paid in carbon taxes through higher ticket prices because of stiff competition in the aviation market.
The government introduced a tax of AU $23 for every metric ton of carbon dioxide emitted by major polluters in the last fiscal year. That rate rose to AU $25.40 this fiscal year, although the opposition has promised to scrap the tax if it wins elections next week.
On Thursday, Qantas reported a modest AU $5 million annual profit after an AU $245 million loss in the previous year.



Share your comments: Log in using your HeraldNet account or your Facebook, Twitter or Disqus profile. Comments that violate the rules are subject to removal. Please see our terms of use. Please note that you must verify your email address for your comments to appear.

You are logged in using your HeraldNet ID. Click here to update your profile. | Log out.

Our new comment system is not supported in IE 7. Please upgrade your browser here.

comments powered by Disqus

Market roundup