Virgin Atlantic suffers loss as Brexit takes toll

Virgin Atlantic has suffered a loss for a second year in a row and warned it would not make a profit for at least another two years as its earnings were hit by Brexit and higher fuel costs. The company made a loss before tax and exceptional items of GBP26.1m in 2018, an improvement on the previous year’s figure of GBP49m. Its problems, including the pound’s fall after the UK’s vote to leave the EU, trouble with Rolls-Royce engines and a fuel bill that went up by GBP149m to almost GBP700m in 2018, would continue to be “challenging” this year, the carrier said. CE Shai Weiss, who took the helm at the end of last year, said he was targeting a return to profitability in 2021: “Everything we’re doing is meant to lead to that crescendo . . . We would like to see continuous improvement in the run-up to the return to profitability.” CFO Tom Mackay said he expected 2019 to be flat on 2018 and the year after to be “broadly break even”. Revenue in the year to the end of December increased 5.8% to GBP2.8b, including a 1.7% increase in passenger revenue per available seat kilometre. Weiss said: “While a loss is disappointing, our performance has improved in 2018 despite challenging economic conditions and put us on a trajectory for growth and return to profitability.” In a letter in Virgin’s annual report, chairman Peter Norris said it was “astonishing and intolerable” that there was no clear path for Brexit. He added that the process of negotiating the UK’s withdrawal from the EU had been “chaotic” and warned that a no-deal scenario had “only a significant downside for our business and for the economy of the UK as a whole”. However, the company said that transatlantic flying would be “undisturbed” by Brexit thanks to the US and UK signing an open skies agreement, and that it would not lose access to the US once Air France-KLM buys its 31% stake in the group this year.<br/>