Virgin Australia reports loss with frequent flyer sell off

Virgin Australia reports loss with frequent flyer sell off
By admin


In line with market expectations, Virgin Australia Holdings has announced a full-year underlying loss of $211.7 million and surprised with the sale of a 35% stake in their frequent flyer program Velocity.

While the airline increased yield by 1.2%, the operating costs increased by 3.4%, eating into the benefits of the yield increases.

Virgin Australia’s 60% stake in budget carrier Tigerair Australia suffered a $46 million loss, something that is not expected to return to profitability until financial year ending 2017.

Virgin’s capacity growth was minimal during the financial year, with the exclusion of Tigerair.

The joining of shareholders Air New Zealand, Etihad Airways and Singapore Airlines to Virgin in July raised $350 million during the financial year.

Virgin chief executive John Borghetti announced the "Virgin Vision 2017" plan for the next three years, in which the airline will focus on maximising the group's potential, by “extracting value from the business and generating sustainable profitability."

"To do this, we need to increase the growing customer loyalty to the Virgin Australia Group. That is what will assure our business of a stable future revenue stream and enable us to deliver sustainable profitability as the market recovers," Borghetti said.

The 35% stake in Velocity deal with Affinity Equity Partners is valued at $960 million, expected to increase Virgin's cash balance by $336 million and reduce its gearing by 8%.

Overall the Velocity program has 4.5 million members.

Borghetti said the deal would allow Virgin to accelerate Velocity's strategy and realise its full potential as a world-class loyalty business.

The airline also announced it will bring forward the delivery of its more fuel efficient Boeing 737 Max aircraft to 2018 from 2019 and will retire its two oldest A330 aircraft and introduce business class on all of its trans-Tasman and Pacific Island routes from early 2015.

Latest News

  • Sustainability
  • Wholesalers

The Intrepid Foundation launches appeal to support Northern Vietnamese communities following Typhoon Yagi

Intrepid Travel has launched an emergency appeal through its not-for-profit, The Intrepid Foundation, to support impacted communities in Northern Vietnam following Typhoon Yagi, which made landfall on 7 September, 2024. All funds raised through the appeal will go directly to grassroots organisation Blue Dragon Children’s Foundation, to provide immediate relief to thousands without shelter, food […]

  • Aviation

Philippine Airlines and VietJet look to community connection near Western Sydney Airport

Both Philippine Airlines and VietJet will explore services from Western Sydney Airport with the airport’s proximity to the Filipino and Vietnamese diaspora in Sydney potentially beneficial to both carriers. Philippine Airlines VP revenue management and commercial planning Alex Featherstone, speaking at the CAPA Airline Leader Summit Australia Pacific, said the carrier would “explore” the potential […]

  • Tourism

Australian Cycle Tours adds new cycle trip to the Murray to the Mountains Rail Trail

Australian Cycle Tours has added a new, extended cycle trip that includes all sections of the popular Murray to the Mountains Rail Trail. The new trip commences in Beechworth with the first two days cycling with a transfer back to Beechworth, before continuing to Myrtleford and Bright, with a cycle on the newest sections of […]

  • Events
  • News

Anangu Communities Foundation raises $75,000 at its third annual Sydney fundraiser

Generous supporters gathered at the Sofitel Sydney Darling Harbour for the third annual Anangu Communities Foundation Sydney fundraiser to help raise $75,000. Voyages Indigenous Tourism Australia administers the Foundation which so far has funded over $3 million in projects to support Anangu communities of Central Australia with a focus on building community capacity in healthcare, […]

  • News
  • Travel Agents

‘Virtuoso on Tour’ photos: Virtuoso showcases its best to agent base

Virtuoso hosted its second annual Virtuoso On Tour,  a destinations event at the ICC in Sydney showcasing tour operators, tourism boards and more to its agent family. The event is designed for travel agency members in Australia and New Zealand to network with Virtuoso partners across the globe. It housed six destination-themed pavilions (Australia & […]

  • Destinations
  • Tourism

The NT tops list of hidden gem attractions out of Aussie states

As Australia steps into spring with temperatures set to rise above average, new research has revealed the states with the most must-see hidden gem attractions with the great outdoors proving a winner! The study, conducted by travel and luggage experts at Bounce, used Tripadvisor and search data to uncover Australia’s most treasured destinations. The Northern […]

  • Health & Wellness
  • Hotels

Fusion Hotel Group celebrates World Wellness Weekend

Vietnam’s wellness-inspired Fusion Hotel Group is celebrating World Wellness Weekend from 20-22 September with yoga and other healthy living activities. Fusion Hotel Group has introduced a series of events and activities for guests at five of its luxury beachfront resorts in Vietnam to World Wellness Weekend. The exclusive offers include yoga, meditation, onsen baths, Zumba, […]

  • Hotels

InterContinental Wellington unveils new Health Club and Classic Rooms makeover

InterContinental Wellington has announced the completion of its newly revamped Health Club and a stylish makeover of its Classic Rooms. Bringing a new level of luxury to its 79 Classic Rooms, including eight accessible rooms, the hotel has meticulously re-styled these spaces in collaboration with Y-6, an acclaimed Interior Architecture and Design studio based in […]