- POSTED: 28 Feb 2014 07:33
Australian budget carrier Virgin has slumped to a first-half net loss of A$83.7 million (US$75 million), blaming intense competition, subdued demand and economic uncertainties.
SYDNEY: Australian budget carrier Virgin slumped to a first-half net loss of A$83.7 million (US$75 million) on Friday, blaming intense competition, subdued demand and economic uncertainties.
The results follow major domestic rival Qantas on Thursday announcing a A$235 million loss over the same six month period to December 31. To cope, Qantas will axe 5,000 jobs and defer aircraft deliveries.
There was no similar drastic action by Virgin Australia, the country's second-biggest airline, despite a significant hit to its bottom line after a A$23 million profit in the same period last year.
"The result reflects the tough trading conditions across the entire industry for the first half of financial year 2014," said chief executive John Borghetti.
"The Australian aviation market continues to be impacted by the significant capacity growth which occurred during the 2013 financial year, compounded by weak economic conditions and the inability to recover the cost of the carbon tax."
The airline said the country's controversial tax -- a levy on each tonne of carbon pollution -- added A$27 million to its costs.
Its underlying pre-tax loss -- the airline's preferred measure of financial performance -- was A$49.7 million.
Virgin, which is majority-owned by state-backed Singapore Airlines, Air New Zealand and Etihad, said that while revenue jumped 6.4 per cent to A$2.2 billion, costs increased 4.5 per cent.
The airline declined to provide any full-year guidance.