Virgin chief executive John Borghetti described as “misinformation” suggestions that the gap with Qantas had closed in on just 5 per cent. “The important thing is looking at the facts”, he said on Friday, adding that the only pressure on executives to return to profitability was from themselves and not its largest shareholders. As well, a number of extra seasonal flights will be added mainly over the busy December/January period. It narrowed its statutory net loss to A$93.8 million from A$353.8 million a year earlier, and booked about A$60 million in savings from the decline in oil prices.
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“As part of the this review, the company has determined that the accounting carrying values of goodwill, other intangible assets, deferred tax assets and freehold property as at 30 June 2015 should be reduced by approximately $94 million in total”.
“Over the past financial year, the group’s return on invested capital has increased from 1.4 to 6.1 per cent”, he said.
“I’m pleased to confirm that based on current market conditions, all fundamental business metrics are on track for the group to return to profitability and report a return on invested capital in line with its cost of capital for the 2016 financial year”.
Tigerair CEO Rob Sharp said the airline had significantly enhanced its on-time performance, and customer satisfaction was at its highest.
– The result was held back most by its underperforming global business, which posted a $69m loss over the year; $23m worse than FY14.
Mr Borghetti said there had been some small signs of improvement in sentiment among leisure consumers in the domestic market, while demand from corporate and government travellers remained strong.
Tigerair Australia will use three Boeing 737-800 aircraft from the Virgin Australia Group to facilitate the airline’s first short haul global services.
Virgin’s worldwide division made an underlying loss of $68.3 million in 2014/15, offsetting a turnaround in its domestic operations and dragging the group into the red again.
IT will be no-frills or no flight for Bali holiday-makers in Melbourne, Adelaide and Perth, after Virgin Australia announced it would exit those routes to make way for budget partner Tigerair.
The standout performer was the loyalty program, Velocity, with an 8 per cent lift in underlying earnings to $81.2 million.
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Increased competitive pressure, particularly in the South East Asian and long-haul markets, constrained yield recovery during the financial year, the airline said.
