Virgin Australia Expects To Be Back In Profit Soon

Virgin CEO John Borgetti with Sir Richard Branson (Photo: Getty/ Paul Kane)

Virgin Australia expects to be back in profit in the second quarter of the current financial year as conditions improve in the domestic aviation market.

Qantas announced a return to profit last month.

Today Virgin CEO John Borghetti told the airline’s AGM there are signs that conditions are moderating and the airline is now in a much stronger strategic position than it was four years ago.

“Whilst the continued uncertain economic environment and subdued consumer sentiment make it difficult for us to give guidance for the 2015 financial year, Virgin Australia expects to achieve an underlying profit in the second quarter of the 2015 Financial Year,” he said.

He also expects the recent 100% acquisition Tigerair Australia to break even by the end of the 2016 Financial Year, six months earlier than previously forecast.

Virgin joined the rest of the Australian airline industry by posting a loss of $355.6 million for the full year to the end of June.

Borghetti called the 2014 Financial Year one of the most difficult operating environments in the history of Australian aviation.

Both Qantas and Virgin are in the middle of extensive cost cutting programs, following years of low yields and price wars.

However, the domestic airline seat war appears over.

Virgin posted an underlying loss before tax of $45 million for the first quarter to the end of September, an 18.3% improvement.

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