Virgin Atlantic suffered ‘intensely challenging’ 2021 but profit expected in 2023

UK carrier Virgin Atlantic is finally transitioning from crisis-mode to recovery this year following an “intensely challenging 2021”, with an expectation that profitability will follow in 2023. Reporting its full-year 2021 results today, the long-haul operator said that while it went into last year with a positive outlook, the period ended up being even more challenging than 2020 by many measures, delaying its recovery until 2022. “2021 started with hopes for recovery, following the successful GBP1.2b solvent recapitalisation of the airline in September 2020, underpinned by more than GBP300m annual structural cost savings fully delivered,” says Virgin Atlantic CE Shai Weiss. “However, with ongoing restrictions and the rapid spread of the Delta and Omicron variants, customer demand was materially impacted and the year became even more challenging than previous, despite the vaccine rollout.”<br/>Virgin’s passenger capacity measured in available seat kilometres increased 9% in 2021 versus 2020 but passenger numbers were flat. Against pre-pandemic levels, capacity was 29% of 2019 levels and passenger numbers were at 27%. Record cargo revenue outpaced passenger income for the year, at GBP448m versus GBP410m, as the airline reported a pre-tax loss of GBP594m, which was a GBP62m improvement from the 2020 figure. Non-fuel costs were down 39% on 2019 at GBP1b, reflecting the impact of the aforementioned GBP300m in annual cost savings.<br/>