Australian Virgin finally turned losses into profits this year

Virgin Australia, owned by Bain Capital, has announced a nearly one-fifth increase in its earnings, reaching AUD 519 million, and stated that it has achieved profitability for the second consecutive year after more than a decade of losses.

A statement released on Monday showed that Virgin's underlying earnings grew, while its competitor Qantas reported a 17% decrease in earnings for the 12 months ending June 30. However, Virgin did not disclose its full financial accounts nor report the overall annual profit figure.

Virgin CEO Jayne Hrdlicka said the earnings growth demonstrated the success of the airline's transformation under the management of its private equity owner.

Bain acquired Virgin, which was then listed on the ASX, in 2020, following the airline's collapse due to the outbreak of the COVID-19 pandemic.

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The financial results were announced a few weeks after Bain agreed to sell a 25% stake in Virgin to Qatar Airways.

The transaction, which requires approval from the Foreign Investment Review Board, will allow Virgin to resume long-haul international flights, a plan that was suspended after Hrdlicka was appointed CEO.

She plans to step down later this year.

Data released by Virgin shows that its revenue grew by 6.8% to AUD 5.4 billion, with annual passenger traffic reaching 19.2 million.

Qantas reported revenue of AUD 21.9 billion and underlying earnings of AUD 2.1 billion for the year ending June 30.Due to foreign competitors and the return of large aircraft, its international division's revenue decreased by 11% to 755 million Australian dollars, thereby dragging down the overall performance.

The airline said it has made a "significant investment" in customer experience and fleet renewal, as part of a 110 million Australian dollar renovation project, 14 aircraft were retrofitted.

Virgin has received six new Boeing 737-MAX-8 aircraft in the past 12 months. In addition, as part of the Qatar investment, Virgin will resume long-haul international flights using the Middle East airline's Boeing 777 fleet.