Virgin’s loss not one to repeat

VIRGIN Australia has posted an underlying loss of $386.7m in the 12 months to June 30 as months of travel restrictions hurt its recovery plans.

The result follows the airline’s 2021 result of a $76.8m underlying loss, and explains why private equity owner Bain Capital is looking at pushing a planned initial public offering into 2024.

Speaking at the Centre for Aviation conference in Adelaide on Wednesday, chief executive Jayne Hrdlicka (pictured) said the loss was a “good result in the context of the last year”. “It’s not one we would like to see again in the future but it’s a result that speaks to the transition out of a really tough period as an industry into a period that looks pretty bright,” Ms Hrdlicka said.

“We are forecasting a profit for the 2023 financial year and a period of continued growth.”

New filings with the corporate regulator showed a statutory loss of $567.9m for the year to June 30, net debt of $1.2bn and revenues rising 45 per cent to $2.2bn.

Government support totalled $258m, down from $481m in 2021, and Virgin’s loyalty program Velocity generated $156m in revenue.

In the same period, Qantas recorded a $1.86bn loss, and Rex finished the 2022 financial year $68m in the red.

Ms Hrdlicka said Virgin Australia had “one of the strongest balance sheets in the world of aviation today with very little debt and a strong asset register” with a fleet of 94 narrow-body jets.

Ms Hrdlicka, who took over as chief executive in November 2020, said losses of “nearly $2bn in shareholder value” in the 10 years before Covid-19 meant a lot of things had not been working as they should within the airline.

“It doesn’t just happen overnight that you lose that much money in a period of time when the industry was actually making money, so we’ve had to focus on improving financial discipline,” Ms Hrdlicka said.