Posted: May 17, 2013 Filed under: Airline & Route News | Tags: Increased, losses, Pledge, Turnaround, Two Year, VIR, Virgin Atlantic, VS
Virgin Atlantic has reported an increase in annual losses despite a rise in revenue in the year to February.
The carrier lost £93 million, up from £80 million a year earlier. However Virgin Atlantic’s group pre-tax loss was lower at just under £70 million thanks to a one-off exceptional item and a profit at Virgin Holidays.
The airline blamed rising costs and tough economic conditions for the losses, but announced a 5% increase in annual revenue to £2.87 billion.
Passenger numbers rose year on year by 188,000 to 5.5 million.
Airline chief executive Craig Kreeger said: “Last year saw a double dip recession, a continued weak macro economy, and an Olympic Games which . . . severely dented demand for business travel.”
Kreeger, who took over running Virgin Atlantic in February, has pledged the airline will turn a profit in two years.
He reported a 9.2% rise in premium economy and Upper Class passengers year on year, coupled with an overall rise in load factors.
Virgin Atlantic is now 49% owned by US carrier Delta Airlines, which bought out Singapore Airlines’ long-held stake in December.
Kreeger said: “Virgin Atlantic has a programme of measures which I’m confident will improve our financial performance considerably and put us firmly on the road to a return to profit in spring 2015.”
The carrier launched its first short-haul and domestic services in March, with new brand Little Red operating a series of shuttle services between Heathrow and Manchester, Edinburgh and Aberdeen.
Kreeger said: “This marks a step change in Virgin Atlantic’s business model.
“Already, 27% of Little Red passengers are connecting onwards with Virgin Atlantic at Heathrow. This will be a significant revenue generator for the business.”
He added: “The alignment with Delta will give Virgin Atlantic passengers greater connectivity throughout North America meaning a more attractive offering and will greatly enhance Virgin’s sales base and revenue opportunities across the US.”
Kreeger insisted: “The enduring strength of the Virgin Atlantic brand has not wavered.”
He reported a 6% year-on-year increase in sales at Virgin Holidays and said: “Virgin Holidays continues to be the UK’s preferred choice in long-haul trips worldwide.”
Sourced by Travel Weekly
Posted: April 11, 2013 Filed under: Airline & Route News | Tags: Air Malta, AMC, ERA, European Regions Airline Association, KM, losses, Peter Davies, Reduce, This Year, turnaround plan
By Alan Dron
Air Malta expects to sharply reduce its losses this year as it enacts its turnaround plan, according to CEO Peter Davies.
Speaking on the sidelines of the European Regions Airline Association (ERA) annual conference in Edinburgh, Davies said he anticipates Air Malta’s loss for 2012 would be around €15 million ($19.6 million), compared to the figure of around €55 million he inherited two years ago.
He said the carrier’s major restructuring plan is on track, largely due to the €130 million in state aid approved by the European Commission (EC) in June 2012.
He said that Air Malta was in a better position than Cyprus Airways, which is reportedly facing bankruptcy if it does not receive financial aid. That, he believed, was a reflection of the parlous state of the Cypriot economy. By contrast, “The economy in Malta is very strong. It’s been managed exceptionally well and unemployment is very low,” he said.
Sourced by ATW
Posted: March 11, 2013 Filed under: Airline & Route News | Tags: Craig Kreeger, Jobs Cuts, losses, Pay Freeze, Potential, VIR, Virgin, Virgin Atlantic, VS
By Phil Davies
Virgin Atlantic’s 9,000 staff face a pay freeze after being warned to brace themselves for deeper losses at the airline.Record annual losses of £135 million are expected, raising the prospect of job cuts, theSunday Times
An internal memo from new chief executive Craig Kreeger seen by the newspaper said the airline’s financial performance is “well behind where we anticipated” following a £80.2 million deficit last year.
The airline confirmed the detail of the memo in which Kreeger imposes an immediate pay freeze and initiated a broad-based cost cutting plan. Virgin Atlantic said the UK airline industry had faced “continued challenges over the past year”.
Plans to increase long-haul revenues by £50 million and make savings of £40 million would not be enough to get the airline back into profitability, said Kreeger.
“The 2012-13 financial airline performance will be a significant loss. Two years of significant cash losses have depleted our resources and decreased our ability to invest,” he said.
This meant the carrier would have to make “some tough calls”.
“One of those decisions is to recognise and communicate the reality that we cannot afford any pay increases this year. It is not ideal that this is the first big decision I have to take,” he added.
Virgin Atlantic faces higher fuel costs and greater competition on transatlantic routes from the British Airways/American Airlines joint business.
The airline has responded by forging its own partnership on the North Atlantic with Delta Air Lines becoming a 49% shareholder and creating its own UK domestic arm to feed traffic onto long-haul services from Heathrow. More fuel efficient aircraft are also being introduced to the fleet.
“These improvements will result in considerable financial savings,” the carrier said. “The airline has also made the decision to suspend salary increases for this financial year.”
Sourced from Travel Weekly
Posted: February 18, 2013 Filed under: UK Aviation News | Tags: £200m, EGLL, Heathrow, LHR, London Heathrow, losses, Record Year, Slashed
By Phil Davies
The owner of Heathrow slashed losses by more than £200 million last year on the back of record passenger numbers using the London hub.The airport operator announced a pre-tax loss of £32.8 million for 2012 against a loss of £225.8 million the previous year. Revenue was up by 8.1% to 2.4 billion.
The company was boosted by the London Olympics and improved passenger satisfaction levels.
Passengers using Heathrow rose to 70 million from 69.4 million in 2011 but the numbers using Stansted – which has since been sold to Manchester Airports Group for £1.5 billion – dropped by 500,000 to 17.5 million
The sale of Stansted is expected to completed by the end of the month.
The group said it will make submissions to the independent Airports Commission headed by Sir Howard Davies into UK airport capacity during the year.
“The main development in UK aviation policy in the last year related to the debate on hub airport capacity, the importance of which is underlined by the fact that in 2012 Heathrow, the UK’s only hub airport, once again operated close to its maximum permitted annual flight numbers,” the company said.
“The hub airport model used by Heathrow and its competitors uses transfer passengers to support flights to long-haul destinations which would not be viable using local demand alone.
“But unlike its rivals in France, Germany, the Netherlands and Dubai, Heathrow is full and its capacity constraints prevent any meaningful increase in the numbers of flights and routes.
“This means the country’s ability to trade with emerging economies is constrained, with potential long-term consequences for UK trade, jobs and economic growth.
“At the start of 2012, whilst the importance of hub airport capacity was beginning to be accepted by the UK government, a third runway at Heathrow was being excluded as a potential solution.
“However, during the year the government established the independent Airports Commission, chaired by Sir Howard Davies, which has been tasked with identifying and recommending the options for maintaining the UK’s status as an international aviation hub.
“It is expected to do this by assessing the UK’s international connectivity needs and recommending the optimum approach for meeting these.”
The Commission is expected to produce an interim report by the end of 2013 which will set out its assessment of the evidence on the nature, scale and timing of the steps needed to maintain the UK’s global hub status.
A final report is expected by summer 2015 which will set out the commission’s assessment of the options and the economic, social and environmental impact and a recommended solution.
Heathrow chief executive Colin Matthews said: “2012 was an historic year for Heathrow. We gave a warm welcome and a smooth journey to thousands of Olympic and Paralympic athletes, and greeted a record 70 million passengers over the 12 months.
“We also achieved record customer satisfaction levels, with three quarters of people saying they had a ‘very good’ or ‘excellent’ experience at Heathrow.
“Our capital investment programme continued, with over £1 billion spent on improving the airport, mainly on the new Terminal 2 which opens next year.
“We also completed our refinancing programme, successfully issuing another £3 billion of bonds to put us on a stable, long-term financial footing.”
Sourced from Travel Weekly
Posted: February 1, 2013 Filed under: Airline & Route News | Tags: Strikes, British Airways, BA, IAG, losses, Job Losses, Iberia, Flight Disruption, International Airlines Group, IB, Sepla, restore profitibility, BAW, IBE
International Airlines Group will slash capacity at Iberia by 15% the group has confirmed.
In a statement IAG, owner of British Airways, said “no agreement has been reached between Iberia and its trade unions over the airline’s transformation plan proposals”. It added: “Iberia will, therefore, press ahead with the previously announced capacity reduction of 15% for 2013.”
Under the plans, 4,500 jobs could go along with 25 aircraft being removed from the fleet. Already Iberia has started cutting routes and optimising services. The Spanish unions are vehemently against the cuts and have threatened to stage more strikes if they go-ahead.
In a statement IAG added it would: “move forward on alternative plans to return Iberia to break-even, in terms of operating cash flow, by the second half of this year and restore Iberia to an acceptable level of profitability by 2015.”
Willie Walsh, IAG chief executive, said: “We’re disappointed that no agreement has been reached. Iberia is ready and willing to negotiate with the trade unions. We are determined and united to implement the necessary changes to secure the future survival and viability of Iberia”.
Sourced from TTG Digital
Posted: February 1, 2013 Filed under: Airline & Route News | Tags: Strikes, British Airways, IAG, losses, Job Losses, Iberia, Flight Disruption, International Airlines Group, IB, Sepla, restore profitibility, IBE, BA.BAW
By Phil Davies
Strikes are being threatened at Iberia after unions rejected a fresh proposal by management on job and salary cuts hours before yesterday’s deadline for agreement.The International Airlines Group-owned carrier and unions were in talks over loss-making Iberia’s plans to axe up to 4,500 jobs and cut salaries in what chief executive Willie Walsh has called a “fight for survival”.
In a revised proposal, Iberia said it offered 3,147 job cuts, 30% fewer than in the original plan, lower wage reductions and capacity cuts of 10% this year rather than an initial plan for 15%.
But the six unions that represent Iberia’s ground and cabin crews rejected the plan in a joint statement yesterday, calling it far from the terms that had been agreed during weeks of talks with management.
The unions did not say when they would go on strike, Reuters reported. Pilots union Sepla also rejected the new restructuring plan, but stopped short of supporting strike action.
The airline had set a January 31 deadline to reach a deal with the unions and has threatened unilateral cuts if staff failed to support the plan.
Iberia said the latest plan enabled the airline to “return to profitability, with the least possible sacrifice” by its workers. The IAG board is due to meet today to respond to the rejection of the revised cost cutting plans.
Sourced from Travel Weekly
Posted: May 31, 2012 Filed under: Airline & Route News, European Aviation News, Tour Operator News, Welsh Aviation News | Tags: losses, TCX, Thomas Cook, Thomas Cook Airlines, UK Tour Operator, Widen
Thomas Cook continues to expect this year to be “challenging” citing the economic backdrop and difficult trading environment with “particularly poor” performances in its North American and French businesses.
The message came after the group revealed steeper winter half year losses of £643 million, including £300 million of non-cash goodwill impairments, up from £197.9 million.
The seasonal underlying loss from operations was £263 million, an increase of £97m on the same time a year earlier.
This reflects the inclusion of losses from acquired businesses in Russia (£10 million) and the Co-op in the UK (£15 million).
“The difficult trading environment increased losses, in particular the impact of MENA on the French result (£17 million increased loss) and the poor trading in the North American business (£25 million worse than prior year),” Cook said.
“Seasonal losses in the UK business are flat year on year excluding the acquired Co-op seasonal losses, whilst within Central Europe, our German business performed well with a 58% reduction in the seasonal operating loss at constant currency.”
Looking forward, the company said: “Whilst our booking position for the second half has improved trading will be dependent on how well the group performs during the important lates market.”
Revenue in Cook’s UK business was down by almost £30 million to £993.1 million in the six months to March resulting in the underlying loss increasing by £14.9 million to £173.6 million.
This reflected a cut in capacity in its mainstream and airline operations.
Controlled distribution increased to more than 82% due to the merger with the Co-operative group and Midlands Co-operative agencies.
“As previously announced, a rationalisation programme is underway to maximize the efficiency of the combined store portfolio with the main benefit of the merger expected to be seen in the second half of the year,” Cook said.
Chief executive Sam Weihagen said:
“This has been a period of significant change for the group.
“At the beginning of this month we were delighted to announce the agreement with our banking group of longer term and more flexible funding.
“This, combined with the sale of Thomas Cook India, the sale and leaseback of some of our aircraft and the disposal of other non-core assets, provides the group with a much stronger financial platform.
“From this platform, we can re-energise our business and begin to rebuild profitability, reduce debt and continue to provide a fantastic holiday experience for our customers.”
Sourced from Travel Weekly
Posted: May 11, 2012 Filed under: Airline & Route News, European Aviation News | Tags: Airport, ALC, Alicante, Barcelona, BC, Cardiff, CWL, EGFF, First quarter, losses, Palma de Mallorca, PMI, Trims, Vueling, VY
By Martin Rivers
Spanish low-cost carrier Vueling has cut its first quarter net losses to €16.5 million ($21.3 million) – a 28.7% improvement on Q1 2011.
Operating losses stood at €26.8 million for the three months to 31 March, while total revenues rose 32.5% to €168.5 million and passenger numbers were up by 24.1% to 2.6 million.
The carrier’s load factor was up by 7.3 percentage points to 76.4%.
Vueling credits its fuel hedging strategy with offsetting high oil prices – up 13% year-on-year to an average price of $120 per barrel – but warns that fuel costs still rose 38% on higher volumes.
Its number of connecting passengers more than doubled to 201,000 in the first quarter, buoyed by onward Iberia flights at Madrid Barajas airport. A new interline agreement with British Airways is further expected to boost this figure throughout 2012.
Looking ahead, the carrier expects to increase capacity by between 20-25% in 2012, turning its focus away from the declining domestic Spanish market and towards new airline partnerships.
Sourced from Flight Global
Posted: May 8, 2012 Filed under: Airline & Route News, Tour Operator News, UK Aviation News | Tags: First Choice, losses, Strong, Thomson, Tui Travel, Tui Travel Plc, Tui Travel UK
By Lucy Siebert
Tui Travel has reported a first half underlying operating loss of £317m in the six months to March 31, compared with a £307 loss in the same period last year.
The group said it had experienced a “strong performance” in the UK, with a £48m improvement in first half underlying operating loss. In the UK market 47% of winter holidays were booked online.
The company said summer trading was “in line with expectations” and that it continued to outperform the UK market. Controlled distribution of UK summer 2012 bookings is at 90%, up six percentage points. It said it was seeing an improved performance for summer across all markets, except France.
Peter Long, chief executive of Tui Travel PLC said: “We are pleased with our overall performance for the first half. The UK delivered a strong Winter performance which attests to our focus on differentiated and exclusive product and being online driven – key elements of our modern mainstream strategy. Our outperformance in this market is continuing into the Summer season and we will ensure that we continue to optimise our position.”
Long added: “In our online accommodation only businesses we continue to deliver healthy growth driven by new markets as well as increasing market share in more recently established markets.
Sourced from TTG Digital
Posted: May 8, 2012 Filed under: European & World Tourism | Tags: Disney, Euro Disney, Fall, losses, Paris, rise, UK Visitors
Euro Disney reported increased losses for the six months to the end of March following a fall in visitors from the UK.
However, Euro Disney reported a small rise in revenue thanks to visitors spending more.
The operator of Disneyland Paris, Euro Disney reported losses of €120.9 million (£99 million), up from €99.5 million (£82 million) a year ago, despite a 1% rise in spending by guests that took half-year revenues to €551 million (£452 million).
Euro Disney reported a full-year loss of almost euro64 million (£52 million) in 2011.
The company blamed the increase in losses on wage inflation and costs associated with preparations for the resort’s 20th anniversary celebrations from April 1.
However, it also reported: “A decrease in hotel occupancy resulted from 33,000 fewer room nights sold primarily due to fewer guests visiting from Italy and the UK.”
Chief executive Philippe Gas said: “The challenging economic environment has impacted attendance and occupancy compared to last year, but we are encouraged by our ability to continue to improve guest spending and resort revenues.”
He added: “We significantly increased our investments in the guest experience through new entertainment and product offerings as well as refurbishments in both our parks and hotels.
“As part of the 20th Anniversary celebration launched in April, we opened our new night-time spectacular, Disney Dreams®. We remain excited about the anniversary festivities and the growth opportunity it presents.”
Sourced from Travel Weekly