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Virgin Atlantic has reported a near doubling of pre-tax profits for 2015, with tour operator Virgin Holidays contributing half the total.
The Virgin Atlantic Group published annual results today, reporting a pre-tax profit of £22.5 million for the 12 months to December, up £10.1 million on the previous year.
In a statement, the group said the improved results were “driven by growth at both Virgin Atlantic and Virgin Holidays”.
The carrier returned to profit a year ago following several years of losses.
It reported: “Virgin Holidays performed strongly and made a substantial contribution to this result, with a profit before tax and exceptional items of £10.9 million.” This was £5 million up on 2014.
However, in October last year Virgin Holidays announced plans to end its 30-year association with the trade by moving to sell solely direct to consumers.
Virgin Atlantic reported annual group revenue of £2.78 billion following a fall in airline passenger revenue of 2.9% year on year.
The carrier’s average load factor was down 2.5% to 76.8% in 2015. Virgin attributed this to “a significant redeployment of capacity, with a 14.8% increase in transatlantic capacity”.
The airline’s operating costs were down £196 million, largely driven by lower fuel costs, and it reported “a significant strengthening of Virgin Atlantic’s liquidity position”.
Virgin also reported a strengthening of its joint venture with Delta Air Lines, with the partnership’s market share between Heathrow and the “interior US” up six percentage points year on year.
The carrier flew 5,939,000 passengers, with 400,000 connecting between Virgin Atlantic and Delta Air Lines, while Virgin Holidays handled 325,000.
Virgin Atlantic chief executive Craig Kreeger said: “This was the first full year of our four-year plan to deliver long-term success and profitability.
“We achieved these improved results in a year in which we also transformed our business and network, laying the foundations for a robust and enduring Virgin Atlantic.”
The carrier is targeting “significant growth in profit” in 2016. Kreeger said: “This year will see a new Passenger Service System, more new Boeing 787-9 aircraft arriving, a Wi-Fi rollout and a retrofitting programme on our Airbus A330-300 fleet.”
Virgin Atlantic chief financial officer Shai Weiss added: “This result represents a significant profit improvement in a challenging revenue environment.
“Falling fuel prices reduced our costs but led to a downward pressure on fares. Our fuel hedging programme meant we did not benefit fully from the fall in the price of oil, but our hedging position will continue to unwind and give us significant savings in 2016.
“We’re confident we have the right fleet, network and partners in place to be more profitable than ever before by 2018.”