Virgin Atlantic posts £28.4 million loss for 2017

Virgin Atlantic posts a £28.4 million loss (before tax and exceptional items) for 2017, following on from a £23 million profit in 2016.

Adverse issues included:

The weakness of Sterling against the US$ with reduced UK consumer demand. There was a, however, a 20% increase in US passengers but, overall passenger numbers reduced by 100K to 5.3 million compared to the 2016 figure; load factor declined from 78.7 to 78.3%

Hurricane Irma et al disrupting the US and Caribbean.

Problems with the turbines and compressor blades of the Rolls Royce Trent 1000 engines powering the 787 fleet.

https://www.ft.com/content/a81e071a-284 ... 62a39d57a0

Will the new Economy products be enough to compete with the nouveau low-cost trans-Atlantic carriers?

I think they just have to outlast Norwegian, whose finances makes interesting reading.
Primera just seems a really odd outfit.

With AF KLM coming onboard from next year and continued DL growth I would suspect a brighter future. I think they will have a big opportunity with economy deluxe. Also remember 350-1000s come onboard in 2019 as well so additional fuel efficiencies. I highly suspect Boeing will also need to fund some form of compensation - whether that’s the 332 leases who knows but the 332s do add additional resilience and if they extend to 4 years (suspect they will given the work that’s going to be done on them) it gives further flexibility in the fleet.

Aside from any profit is good news, what would actually be a decent profit for VS? With the fluctuating profits/loss and 2016 being hailed as a good year, it just seems like a hell of a lot of effort for the end result.

No chance of the metal pens and ice cream coming back then

I think they just have to outlast Norwegian, whose finances makes interesting reading.
Primera just seems a really odd outfit.

Like I said about the new VS Economy fare structure, the game has changed whether Norwegian are around in the long-term or not. To be honest, I'd be nervous about booking with them if what's been reported about their finances is correct.

As for Primera, it'll be interesting to see how they get on with their low-cost TATL flights from Birmingham and Stansted. They're clearly adopted the Norwegian model and targeting 2 UK airports which have a very limited TATL network.

Either way, I see the new wave of low cost TATL travel as a threat which VS should ignore at their peril. The recent changes to Economy is an acknowledgement of the game changing and other airlines will eventually follow suit.

Aside from any profit is good news, what would actually be a decent profit for VS? With the fluctuating profits/loss and 2016 being hailed as a good year, it just seems like a hell of a lot of effort for the end result.

I think for VS, just continuing to make profits year-on-year will be sufficient, especially considering the losses they made in recent years and the actions they've taken to restore themselves to profitability. Given their huge reliance on the UK-US routes and considering the weak pound vs the US dollar, I'm not surprised if this is one reason for last year's losses. It wouldn't have impacted much in 2016 when the pound weakened overnight as many people will have already committed to their US travel plans when the pound was stronger.

The figures also adds weight to my long-held suspicions that an upturn in US-originating passengers due to the weak pound won't fully make up for any downturns in UK-originating passengers.

On the Norwegian topic, Mrs J & I recently returned from the Caribbean with VS, and were speaking to a Norwegian pilot who was also returning from holiday. The pilot was talking about the company and how a number of the senior pilots including himself, are actively looking for another airline, as they can see "what is coming".

From what he was saying, money is so short in Norwegian, he doesn't think it will be too long until there is an announcement.

Dan

I highly suspect Boeing will also need to fund some form of compensation

Rolls Royce will be paying massive payouts to all affected, it could be that these payments haven't come through this financial year though.

With such a USA focused route network, would of thought pound fluctuations would have limited impact due to company holding plenty of $ as well as £.

In the words of David Gunson, they made a 'negative profit'...

W.