Virgin Atlantic reported record revenues in 2023 and narrowed its losses, with growth driven by “continued desire for premium leisure air travel” as corporate travel continued its more sluggish recovery.
The airline reported record total revenue of £3.1 billion for its financial year ending 31 December 2023, up £265 million compared to 2022, and is “on course” to return to profitability in 2024.
In its annual results published today, Virgin said that “continued cost discipline combined with enhanced fleet utilisation” saw EBITDA come in at £352 million, while losses before tax and exceptional items were cut from £206 million in 2022 to £139 million in 2023.
Virgin carried more than 5.3 million passengers in 2023, with a load factor of 77 per cent, while capacity, measured in available seat kilometres, increased 16 per cent versus 2022.
Speaking to BTN Europe onboard the airline’s new service to Bengaluru, India, Virgin Atlantic CEO Shai Weiss said its fleet would return to 45 aircraft by the end of 2024 but it will operate 15 per cent more flight sectors than in 2019.
“Rising costs have been a big challenge but inflation looks more contained and interest rates are more stable,” said Weiss, noting the airline had already banked £1 billion’s worth of business in the first quarter of the year.
An improving economy “gives me confidence” that Virgin will achieve profitability in 2024, said Weiss.
Corporate travel returned to 75 per cent of 2019 volumes in last year, he added, but the airline is “conservatively” predicting 75 to 80 per cent recovery in 2024. “Does it ever get back to 100 per cent? I don’t know, that’s too hard to say. But 80 per cent, yes, for sure.”
The airline axed its services to Austin, Texas, in January less than two years after launching the route as it sought to tap into the fast-growing city’s business potential.
“The hardest thing we have to do as an airline is to close routes and the best thing we get to do is to launch them,” said Weiss. “Sometimes we have to move our network around. Austin didn’t work out. We’ve seen a slowdown in the tech sector, especially in the US. It costs a lot to launch a new route and you only see the returns in years two and three.”
In a statement accompanying the airline’s financial results, Weiss said: “A loss is never satisfactory; however, our performance and results illustrate that we have made really good progress in 2023, the plan is working, and Virgin Atlantic is on course to return to profitability in 2024.”
Oli Byers, Virgin Atlantic chief financial officer, added: “[Our] 2023 financial results reflect a year when our team delivered record revenue and a return to pre-pandemic EBIT performance. Importantly we narrowed losses and set up a return to profitability in 2024.
“Our financial, commercial and operational performance demonstrates that our plan is working, despite the challenges of inflation, rising interest rates, and higher fuel and energy prices.”