Virgin Atlantic Defies Recession As Profits Double

by Jason Gorringe, Tax-News.com, London

28 May 2009

Britain's second largest carrier, Virgin Atlantic, has reported pre-tax profits of GBP68.4m (USD109m) for the 12 months ending February 2009 - double what they made in the year prior, despite the onset of the recession.

Just 12 months ago, the carrier (which was founded in 1984 as an offshoot to Sir Richard Branson's Virgin Group) reported that it had made a pre-tax profit of GBP34.8m (USD55m) - before the recession took hold and oil prices rocketed.

The 50% rise in profits has largely been attributed to a rise in the number of premium travellers.

The company's "prudent management decisions" during the onset of the financial downturn have also been considered vital to its current success, particularly the decision to hedge against the rising price of oil which insulated the company against record prices.

Commenting on the news, Steve Ridgway, the company's chief executive announced on May 25:

"We are winning market share from our competitors during the toughest trading environment ever. Our load factors remain resilient as travellers take advantage of these bargain fares, proving the value of vigorous competition."

Company President Sir Richard Branson added:

"The last financial year has proven to be the most volatile yet in our 25-year history."

"To increase profits against a backdrop of such a severe recession is an excellent achievement by all of our staff at Virgin Atlantic."

Other airline companies have been less fortunate in the wake of the economic downturn. Just last week, Britain's number one carrier, British Airways, reported a loss of GBP401m (USD642m).

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