Virgin Atlantic completes biggest ever product investment programme as it reports its 2012 financial

Virgin Atlantic Airways Ltd today reported an increase in revenues, passenger numbers and cargo sales despite a challenging year of trading. In its annual accounts for year ending 29th February 2012 the long haul airline also highlighted rising costs and its progress on its record product investment programme.

2011/12 Full Year Group Performance
• Revenues increased by 3% to £2.74billion
• Airline passenger numbers increased by 2% to 5.4million
• Load Factor 78%
• Cargo revenue increased by 7% to £239.6million
• A pre-tax Group operating loss of £80.2million
• Strong cash position of £486.7million
• New Manchester to Las Vegas route launched
• Virgin Holidays doubled its retail network to 86 outlets, creating 160 new jobs
• Air Passenger Duty collection increased by 25% to £195m
• Fuel unit cost increased by 32% (before hedging)

Virgin Atlantic Chief Executive, Steve Ridgway said: "In an incredibly challenging market, we have managed to grow top line revenues and fly more customers than last year. However, with the prevailing uncertainty in the economy, sky high fuel prices and a 25% hike in our air passenger duty fees, converting this sales growth into profit has not been possible.

"Despite this backdrop there can be no let up so to keep Virgin Atlantic at the forefront of airline customer innovation we have announced our biggest ever service and cabin investment programme."

Virgin Atlantic's £100m Upper Class product investment launched in February 2012 includes:

• New Upper Class cabin including new seat and bar
• New Upper Class menu and service
• New Clubhouse opened in New York JFK
• New Clubhouse in New York, Newark opening in November 2012

Outlook
• Quarter 1* Load Factor 77%
• Quarter 1* airline revenues up 5.8% to £481.9million
• Quarter 1* passenger numbers up 2.3% to 1.3million
• Increased efficiency drive to reduce operating costs by £50m
• Additional service from London Heathrow to New York JFK (now six daily services)
• New route launches to Cancun, Mumbai and Vancouver
• Six Airbus A330s due for delivery in 2012

Steve Ridgway said: "We have had an encouraging start to the year, continuing to grow our passenger numbers and our revenue. Our new route launches to Vancouver and Cancun will strengthen our position as the number one UK long haul leisure airline. The Mumbai route will prove very important in connecting business traffic from East to West via London and enabling the UK to better connect with the one of the world's most vibrant economies.

"The introduction of the A330 aircraft will further enhance what is already one of the youngest fleets in the world and each plane will use 15% less fuel per seat. These aircraft will add significant additional cost savings to our operating efficiencies programme, helping us to combat the economic headwinds that are currently prevailing," said Steve Ridgway.