Virgin Australia: “an important crossroad in our industry’s history” and 1H2014 loss as expected

Amid the smoke and noise of Qantas' reporting of its 1H2014 results, Virgin Australia's announcement of a pre-tax loss of AUD50 million for the period went almost unnoticed. Most media columns covering Virgin came from Qantas, in the context of their contrasting models, foreign ownership and the utter silliness of the Qantas Sale Act.

As it was, Virgin Australia's loss was pretty much as anticipated, although involving several dimensions in the year-on-year comparisons, given the carrier's apples and oranges situation, with AUD18.4 million (USD16.4 million) loss-making Tigerair Australia (now 60% owned) joining the group in Jul-2013 and as "business transformation and other expenses" accounted for another AUD69 million (USD61.6 million). During the first half of the FY2013, Virgin had also acquired Skywest, further clouding financial performance comparisons.

As CEO John Borghetti implied in his presentation, these first half results for Australia's industry were however about more than merely dollar figures, given the strategic upheavals prefaced in the political debate currently raging: "I believe this is an important crossroad in our industry's history".

It is certainly one of them - but it won't be the last in what promises to be a turbulent decade for Australia's airlines.