CANBERRA: Improved production and reduced costs have paved Virgin Australia’s path towards making a full year profit in 2015-16, the first quarter status of the company indicated.
The Australian airline presented the annual report for the first quarter on Thursday, which showed that $8.5 million pre-tax profit a significant swing from previous quarters’ loss of $45 million before tax.
During the quarter, Virgin Australia managed to keep average airfares to ensure more passengers flew using its aeroplanes. Chief executive John Borghetti said that the company not only kept the price low for itself, but also ensured the same for its low-cost units like Tigerair Australia. This became the main cause for driving the airline giant towards significant profits in the current financial year.
“The group has achieved a significant turnaround in financial performance for the first quarter of the 2016 financial year,” the chief executive was quoted by the Australian Aviation as saying. “This result reflects our continued success in driving revenue per available seat kilometre and yield growth, while controlling costs.”
The company is expected to return to being profitable in 2016 after witnessing a terrible downfall. Both Jetstar and Tigerair grew capacity in the recent quarter. However, Tigerair’s number of passengers increased to 21.9 percent from 21.5 percent in 2014-15, as reported by the Sydney Morning Herald.
The unit recorded a pre-tax and before interest profit of $400,000 in the first quarter of 2015-16. “Tigerair Australia has further improved performance, delivering its first profit for the September quarter,” Borghetti said.
In spite of reducing its capacity to carry domestic passengers to 4.28 million, which accounts to reduced capacity by 4.2 percent as compared to 2014-15, Virgin Australia has shown a vital swing by facilitating a full-year profit for financial year 2015-16.
