Positive cashflow set to lift Virgin

AUSTRALIA’S second-largest domestic airline, Virgin Australia, says it expects to report a positive cashflow soon.

In a statement yesterday to the stock exchange, Virgin said it expected its positive free cashflow for the year to June would be up to $50 million, which was an improvement of up to $140 million on the same period a year earlier.

Virgin, which has invested heavily in corporate travel to combat Qantas, also told the Australian share market operator it would continue to improve its debt levels.

“The group continues to implement on a range of balance sheet and free cashflow initiatives which were outcomes of the 2016 capital structure review,” Virgin said. “As a result of these initiatives, the group continues to make positive progress on its cashflow.”

The news came as the airline also said it expected earnings before interest and tax for the Velocity Frequent Flyer business to be up by 2 to 3 per cent on the 2016 financial year.

“Velocity ... continues to attract Australians, it reached eight million members during June 2017,” the company said.

Shares in the carrier yesterday added 1c, or 6.3 per cent, to 17c.