Virgin Atlantic reports record revenue as losses narrow

(Sharecast News) - Virgin Atlantic reported record total revenue of £3.1bn in its 2023 results on Wednesday, up £265m year-on-year as the long-haul airline capitalised on demand for premium leisure travel and holidays. The airline, 49% owned by Delta Air Lines, put the achievement down to a combination of continued cost discipline and enhanced fleet use, contributing towards EBITDA of £352m.

Notably, it reported EBIT of £80m, surpassing the pre-Covid-19 results in 2019 and marking a milestone on the airline's path to sustainable profitability.

The narrowing of losses before tax and exceptional items to £139m from £206m also indicated a positive trajectory, with Virgin Atlantic expecting to return to profitability in 2024.

It closed the year with a cash position of £406m, up from £399m in 2022.

The airline said 2023 served as the midpoint of 'Velocityx', the airline's four-year strategic plan, aimed at positioning Virgin Atlantic as "the most loved travel company" while ensuring sustainable profitability.

During the year, Virgin Atlantic carried 5.3 million passengers and achieved a load factor of 77%.

Passenger capacity increased 16% compared to 2022, with 23,720 sectors flown on 41 aircraft, demonstrating continued growth in fleet use.

Despite corporate travel experiencing slower recovery, passenger revenue for 2023 reached £2.4bn - the highest on record, and up £323m versus 2022.

The airline said it maintained industry-leading operational performance, with a flight completion factor of 99.7% and a punctuality score at Heathrow Airport exceeding industry averages by ten points.

Virgin Atlantic Holidays met sustained demand for premium sun destinations, carrying 231,000 holidaymakers in 2023, supported by the launch of new routes and the return to popular destinations.

Meanwhile, Virgin Atlantic Cargo delivered revenue of £196m, operating 158,000 tonnes of cargo, reflecting market normalisation post-pandemic.

Total airline non-fuel costs amounted to £1.8bn, with an airline non-fuel cost per available seat kilometre (ASK) of 3.98p, reflecting continued cost discipline.

In November, Virgin Atlantic operated Flight100, the world's first transatlantic flight on 100% sustainable aviation fuel, earning a Gold rating from the Centre for Aviation (CAPA) in its 2023 Airline Sustainability Benchmarking.

"In 2023, we capitalised on continued strong demand for leisure air travel and holidays, which shows that desire for experiences and travel remains, resulting in record revenues," said chief executive officer Shai Weiss.

"A loss is never satisfactory; however, our performance and results illustrate that we have made really good progress in 2023, the plan is working, and Virgin Atlantic is on course to return to profitability in 2024.

"My gratitude goes to our teams, who go above and beyond to deliver an amazing experience, making our customers smile every day."

Weiss said that at the midpoint of 'Velocityx', the airline's four-year strategic plan, and as it prepared to mark 40 years of flying in June, its commitment of becoming "most loved travel company" and sustainably profitable was stronger than ever.

"2024 is the turning point for Virgin Atlantic, the culmination of our transformation and the year we make it count."

Reporting by Josh White for Sharecast.com.