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17-Nov-2016 11:42 AM

Virgin Australia outlines 'Better Business' operational and capital efficiency initiatives

Virgin Australia CEO John Borghetti reported (16-Nov-2016) the group plans to conduct the following operational and capital efficiency initiatives under its 'Better Business' programme, intended to simplify the Group’s business and improve productivity:

  • Fleet and network optimisation: Reduce fleet types from eight to five. Virgin Group has already sold four Embraer 190s with the sale of the fifth on track to be completed by the end of Nov-2106. A request for propsals process for its ATR turboprops and the remainder for the E190 fleet is underway;
  • Operating efficiencies: Top down organisational rightsizing underway. Virgin Group has created a single point of accountability for each of our operating business segments and reduced management positions in the past few months;
  • MRO and engineering: As part of the fleet simplification process, Virgin Group is consolidating maintenance operations and reducing maintenance costs;
  • Procurement and supply chain: Driving a reduction of costs and created efficiencies in major contracts, including reducing catering costs and implementing further fuel efficiency initiatives;

Virgin Australia Group is already generating savings from the Better Business programme and expect to deliver net free cash flow savings of AUD300 million (USD224 million) p/a by the end of FY2019. [more - original PR]

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