Virgin Atlantic sees profits double - what recession, BA?
We told you last week how British Airways had taken the economic recession on the chin, quickly followed by a Kato-style karate chop to the windpipe. BA reported a loss before tax of £401 million for the year to March 31st, compared to a profit of nearly £1 billion for the previous year. One of the reasons cited by the airline was the drop in passengers flying business and first class - a fall of 13 per cent - because it's on these margins that airlines make their profits.
Not so at their price-fixing compadres/hotheaded competitors Virgin Atlantic, who have just announced an increase in revenue to the end of February of over eight per cent, and a near-doubling of profits from £34.8 million to £68.4 million. The airline carried nearly six million passengers - still a long way short of BA's 33 million - but have stated the improved performance is down to the increase in sales of premium economy, business and first class seats.
Virgin have benefited from a series of strategic sales throughout the year, which have seen transatlantic flights drop to as little as £250 for economy seats, and around £500 for premium economy. BA's current tactic is to go straight for the jugular with a business class sale, although economy flights for Autumn are currently available for a shade over £300.