Virgin Atlantic, once teetering on the brink of collapse during the pandemic, now anticipates reaching new heights with record operating profits this year as passenger numbers soar back to pre-Covid levels.
The Heathrow-based carrier, jointly owned by Sir Richard Branson’s Virgin Group and Delta Air Lines of the US, clawed its way back to operating profitability in 2023. However, burdened by pandemic-induced debt, the airline continues to grapple with significant losses at the bottom line.
Oli Byers, the airline’s finance director, highlights robust demand for premium leisure travel, particularly evident in strong outbound traffic from the UK to coveted destinations like the Caribbean, the Maldives, and Dubai. Additionally, Virgin Atlantic has seen an influx of inbound passengers from the United States, further bolstering its recovery.
With renewed confidence, the airline is doubling down on its commitment to India, expanding its services with a second daily flight to Mumbai alongside existing routes to Delhi and Bengaluru. Despite fierce competition from British Airways, Air India, and Gulf carriers, Virgin Atlantic aims to capture a significant market share, flying approximately one million seats annually to the sub-continent.
In 2023, Virgin Atlantic reported record revenues of £3.1 billion, surpassing pre-pandemic levels despite a slight dip in passenger volumes. Operating profits reached £80 million, an improvement from 2019 figures, signaling the airline’s resilience amidst ongoing challenges.
However, increased interest rates and servicing debt resulted in pre-tax losses of £139 million, albeit a reduction from previous years. Looking ahead to 2024, Byers forecasts a return to pre-Covid passenger levels, with revenues set to break records and operating profits expected to exceed £200 million.
Since consolidating operations at Heathrow and expanding its slot portfolio, Virgin Atlantic has positioned itself for growth opportunities. Plans to acquire additional slots and enhance its presence within Heathrow’s Terminal 3 underscore the airline’s commitment to capitalising on strategic advantages.
As Virgin Atlantic charts a course towards profitability and expansion, its resilience amidst turbulent times heralds a promising trajectory for the iconic carrier in a fiercely competitive aviation landscape. Business Matters explores the strategic moves and optimistic outlook driving Virgin Atlantic’s resurgence in the post-pandemic era.