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Virgin Atlantic expects to report an annual profit for the first time since the pandemic this year, catching up with rivals after high costs had slowed its recovery.
The airline, which is majority owned by Sir Richard Branson’s Virgin Group, on Wednesday said that “sustained consumer demand” across its network of long-haul flights was helping its rebound.
In contrast to its major competitors, the carrier remained unprofitable last year. It reported a loss of £139mn, an improvement on its £206mn loss the year before.
Oliver Byers, Virgin Atlantic’s chief financial officer, said the company’s performance was weighed down by higher interest rates, as the airline continues to pay back the debt it took on during the pandemic.
After being denied access to government funds, Virgin was forced to raise more than £1bn from the private sector as it battled for survival.
The group on Wednesday highlighted “very strong demand” from leisure travellers flying in premium cabins, and from corporate customers, where demand has returned to about 80 per cent of pre-pandemic levels.
The Virgin Group owns 51 per cent of the airline, while the remaining 49 per cent is held by US carrier Delta Air Lines. Since 2020, Virgin has achieved £300mn in annual cost savings, including job cuts.
International Airlines Group, the owner of Virgin’s rival British Airways, reported record annual earnings last year, as operating profits more than doubled to €3.3bn.