Virgin Atlantic has signalled improving trading conditions despite posting a group pre-tax operating loss of £132 million for the 2009-10 financial year.


Revenues declined by 8.6% to £2.35 billion in the 12 months ending in February. However, Virgin Holidays delivered a record profit of £24 million in the period.


Overall revenue growth in the first quarter of the carrier’s financial year was achieved despite the impact of the ash cloud in April. The airline estimates that customer compensation and operational costs will total £30 million.


Total airline revenue in the three months was up by 10% to £513 million, with the passenger load factor up five percentage points to 82%.


The improvement in the March-May quarter of this year was attributed to steady growth in both business and leisure passengers including market share gains from its competitors.


Business-class market share increased by 5% with 15% additional Upper Class passengers at a time when British Airways suffered from a bout of cabin crew strikes.


Virgin Atlantic is recruiting 300 staff. Half of these will be cabin crew, with the remainder for a new customer call centre due to open in Swansea this autumn.


The new cabin crew positions include support for a new route from Manchester to Las Vegas.


Chief executive Steve Ridgway said: “Along with the rest of the industry, we have just faced one of the toughest years in our history.


“However, the early action that we took to deal with the losses from the worst recession on record, not only enabled us to protect the business but also provided us with a strong platform for growth this year.


“We have just delivered a new brand identity, are hiring hundreds of new staff and are looking forward to the new aircraft deliveries early next spring.”


Ridgway added: “The start of the year has been encouraging despite difficult trading conditions.


“Demand is picking up across the majority of our routes and forward bookings for the summer have been very positive.


“From all of the major operational challenges that we have faced this year, including snow and volcanic ash, the response from everyone at Virgin Atlantic has been outstanding.”


A “strong increase” in demand in its Upper Class cabin had led to revenue improvements on last year. The airline was also encouraged by a strong start on its new business route to Accra, Ghana.


Virgin Atlantic is due to add five new Airbus A330 aircraft next spring.