Virgin Australia has increased its full year net loss more than three-fold to $355.6 million.
The airline also announced that it had sold a 35 per cent stake in its frequent flyer program to private equity firm Affinity Equity Partners for $960 million.
Virgin chief executive John Borghetti said the last year had been one of the most difficult operating environments in the history of Australian aviation.
Virgin increased its domestic capacity during the year, with available seat km (ASKs) rising to 26.4 million kilometres from 25.9 million kilometres.
But international ASKs were down from 15.9 million kilometres to 15.8 million kilometres.
Virgin’s yield on fares increased by 1.2 per cent but that was below its overall cost increases.
Virgin’s share of the corporate and government markets for passengers had been increased to more than 25 per cent, Borghetti said.
It was targeting 30 per cent by June 2017.
“While the current environment remains challenging, the Virgin Australia Group has significantly enhanced its strategic position over the last four years and is well placed to capitalise on market recovery,” Borghetti said.
It’s been a tough week in the aviation industry; Qantas posted a record $2.8 billion loss on Thursday, skewed by a $2.6 billion writedown to the value of the airline’s international fleet.
And crisis-stricken Malaysia Airlines says its second-quarter loss has nearly doubled as the loss of flight MH370 spurred a decline in bookings, warning the red ink would accelerate as the year wears on.
The flag carrier said it posted a 305.7 million ringgit ($A105.17 million) loss in the April-June quarter, which followed the March 8 disappearance of flight MH370 with 239 passengers and crew aboard.
That compared to a 175 million ringgit loss in the same period of last year.
The latest results mark the sixth straight quarterly loss for Malaysia Airlines (MAS), which has struggled to stay competitive and is now in dire financial straits following MH370 and the July 18 shooting down over Ukraine of flight MH17, which killed all 298 aboard that plane.
“The impact of the MH370 incident and intensified competition resulted in” a 6.7 per cent drop in bookings, it said in a statement to the Malaysian stock exchange.
But the airline – which is in the process of being taken over by Malaysia’s state investment fund as part of a bid to restructure and rescue the company – warned that second-half results will be even worse.
“The full financial impact of the double tragedies of MH370 and MH17 is expected to hit Malaysia Airlines in the second half of the year, where we saw a sharp decline in average weekly bookings by 33 per cent immediately after the MH17 incident, with numerous flights cancelled,” it said.
MAS has bled money for years, losing a combined $US1.3 billion over the past three calendar years before 2014, as intensifying competition from more nimble rivals like Malaysia’s fast-growing budget carrier AirAsia have lured away travellers with their rock-bottom pricing.
But the sudden association with tragedy for an airline that previously had a solid safety record has pushed it the financial precipice.
