Virgin Australia posts 6 revenue rise

Virgin Australia has benefited from lower oil prices.

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By :  ,  Financial Analyst

Virgin Australia highlighted lower oil prices for its latest rise in revenues.

The carrier reported a six per cent increase in revenues, taking it to A$2.38 billion (£1.19 billion) compared to the same period a year earlier. This boost allowed the company to narrow its losses to A$47.8 million following a significant cost-cutting programme in the six months to December.

Australia's second-largest carrier, behind Qantas, has confirmed that it is expecting an improved performance in the second half of its financial year. It has benefited from reaching an agreement with Qantas to end a domestic price war which has had a damaging effect on both companies when it comes Australian flights.

In its trading statement, Virgin Australia stated that its underlying profit before tax was A$10.2 million, a significant improvement on the A$45.4 million loss in the first half of its financial year. It has made major strides in turning around its subsidiary Tigerair Australia, which posted a A$500,000 underlying profit.

John Borghetti, Virgin Australia's group chief executive, said: "Our people and their willingness to go above and beyond for our customers remains central to our ability to differentiate the Virgin Australia Group in the market.

"I would like to thank each and every one of our team members for their dedication to our business and to the successful execution of the Virgin Vision strategy."

Improved performance

Virgin Australia's latest trading update is a significant improvement on August's full year announcement. In the summer, the carrier recorded a A$355.6 million after-tax loss for the year ending in June, a trebling of the company's poor performance. At the time, the carrier blamed weak consumer sentiment and overcapacity in the market as the reason behind the slump.

Virgin Australia's current share price increased 1.05 per cent as of 09:41 GMT on Thursday (February 19th).

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