Australian carrier Alliance Airlines expects its full year profit before tax to come in above A$32.5 (US$22.5m), about 25% higher than its result for the previous financial year. If confirmed, it will be the largest full-year profit in the carrier's 17-year history. CE Lee Schofield says that the stronger result is being driven by significant growth of its business as it continued to diversify into other areas while continuing to win contracts in its core resource charter market. "We now have 4 different flying categories (contract, charter, wet lease and scheduled airline services) and operate regularly to over 50 destinations," he states. As well as resource charter operations, Alliance has a close codeshare and wet-lease relationship with Virgin Australia. This year, however, it has been the target of Qantas, which now owns a 20% stake in Alliance. <br/>
unaligned
Lufthansa will speed up cost cutting to try to boost productivity at its Eurowings subsidiary as it battles to defend market share in a competitive European market, CE Carsten Spohr said. "After quick growth in recent years we will first and foremost reduce complexity and costs (at Eurowings)," Spohr said in an interview with Der Spiegel. "That's why we have switched growth to zero. That is an absolutely rational step in an industry with high overcapacity," he added. Poor margins at Eurowings compared with sector rivals were cited by the group as a major reason for a profit warning Sunday. Eurowings' revenue was also forecast to fall sharply in Q2. Asked about consequences for jobs, Spohr said Eurowings would retain a strong position within airports such as Frankfurt, Munich, Zurich and Vienna. <br/>
Virgin Atlantic’s decision to divide its economy product into 3 tiers 2 years ago has been paying dividends, EVP-commercial Juha Jarvinen said. The carrier now offers economy light, the lowest fare with hand baggage only; classic economy, with one checked bag; and economy delight, which adds more legroom and priority boarding. Premium and upper-class products are also available. “Since doing that and since we have the same class mix, we actually grew incremental revenue by GBP27m [US$34m] since the launch in March 2018,” Jarvinen said. The airline has seen incremental revenue from passengers buying more bags or upgrading to economy delight, he said. The economy light offering was an effort to better compete with LCCs like Norwegian, and often exceeds passengers’ expectations, Jarvinen said. <br/>