KEY POINTS:
SYDNEY - Budget airline Virgin Blue holdings reported a first-half net loss of A$101.4 million ($128 million) as the company took charges for investment in transpacific partner V Australia
and reversals of currency and fuel hedges.
The airline's net loss for the six months to December 31, 2008 compared with the net profit of A$113.3 million reported for the same period the year before, the Brisbane-based company said.
Virgin said it wouldn't pay a first-half dividend.
Revenue for the first half grew 12 per cent to A$1.35 billion.
Virgin said its underlying net profit before tax of A$60 million for the first half of 2008-09 was in line with consensus estimates and "a creditable performance among airlines globally, despite an extremely tough operating environment".
The result excludes a non-recurring A$60.6 million after-tax investment in V Australia (including a A$42 million unrealised foreign exchange loss) and an $80.8 million after-tax expense relating to the mark to market of ineffective fuel and currency hedges.
Virgin Blue Airlines Group chief executive Brett Godfrey said the underlying business was resilient.
"Our underlying business remained resilient despite an exceptionally challenging and historically unprecedented operating environment," Godfrey said.
The board said the current outlook for the rest of the financial year remained challenging.
"However, no change in guidance, last given at the company's November 2008 AGM [annual general meeting], is required at this time.
"The softening demand and other factors contribute to this being the most volatile operating environment in the history of commercial aviation, Australia included, with domestic fares at 17-year lows and yield impacted accordingly."
At the AGM, Virgin shareholders were told it would be a tough year for the aviation industry - with industry rationalisation gaining momentum as economic conditions drove further need for consolidation.
Godfrey said one standout in the first half 2008-09 results was a fall in the underlying non-fuel cost per available seat kilometre (Cask) of 1.2 per cent to 6.55 cents.
Virgin said the last few months of 2008 were characterised by a noticeable loss of consumer confidence due to the global economic crisis and local economic downturn, putting pressure on margins.
Godfrey said capacity management and cost-containment programmes were initiated at the start of the downturn last June, enabling the business to remain profitable.
- AAP
