Virgin Australia Full-Year Loss Widens On Charges

Virgin Australia’s full-year net loss has more than doubled from a year ago, hurt by one-off costs of a restructure to cut capacity amid stiff competition.

Sydney-listed Virgin posted a net loss of AUD$224.7 million (USD$169 million) for the year to June 30, compared with a AUD$93.8 million loss in 2014/15.

The Richard Branson-backed airline, which competes with Qantas, is cutting capacity, taking on a new major shareholder, eyeing flights to China and seeking to raise capital to help shore up its margins.

Its fourth-quarter and annual results included previously announced charges related to efficiency initiatives "with a focus on the simplification of the group’s fleet through the removal of surplus" capacity and aircraft.

Without the one-off charges, Virgin said annual pre-tax profit was AUD$41 million, contrasting with the previous year's AUD$49 million pre-tax loss.

"The group improved its underlying performance, passenger numbers and load factors in the fourth quarter in a challenging operating environment," chief executive John Borghetti said in a statement.

"During the quarter, the group took action in response to operating conditions through strategic capacity reductions in line with demand."

In the fourth quarter, Virgin said it reduced international seating capacity by 18.2 percent, and cut domestic seating capacity by 2 percent.

The company is scheduled to publish detailed full year results on August 5.