Virgin Atlantic forecasts delayed return to profitability as costs rise

Virgin Atlantic has pushed back forecasts for a return to profitability, as rising costs hampered its ability to capitalise on a sharp rebound in air travel. The airline, owned by billionaire Sir Richard Branson’s Virgin Group, said on Wednesday that it expected to turn a profit in 2024, after predicting last year it would be “sustainably profitable” in 2023. The airline reported a loss before tax of GBP342mn for 2022, an improvement on the GBP468mn loss it posted the previous year. The announcement underlines Virgin’s longstanding troubles and sets the airline apart from its rivals, which have recently welcomed a return to profitability after Covid-19 restrictions on international travel were eased last year. British Airways owner International Airlines Group in February put two years and E10b of losses behind it to report an operating profit of E1.3b for 2022. Virgin’s passenger numbers almost quadrupled last year, lifting revenues to GBP2.9b, or 98% of pre-pandemic levels. However, profitability had been hit by “persistent high inflation” and a weaker than expected pound, said CFO Oliver Byers. He added that the rapid rise in interest rates, as central bankers sought to control inflation, had also increased the cost of repaying Covid-related debts. After being denied access to government funds, Virgin was forced to raise more than £1bn from the private sector. Byers said Virgin did not expect to be “that far away” from profitability by the end of 2023, when it was forecasting record earnings before interest, taxes, depreciation and amortisation. He said the airline would not need to implement further cost-cutting plans to deliver a profit. <br/>