Loss-making Virgin Atlantic said on Wednesday that it is finally on track to return to profitability in 2024 after narrowing its annual losses in 2023 to £139 million from £206 million the year before.
The Richard Branson-controlled airline said sustained demand for premium leisure air travel and holidays had helped it post a record annual revenue of £3.1 billion, which is up £265 million from 2022.
Virgin Atlantic is now at the tail end of a four year turnaround programme which is known internally as Velocityx. Spearheaded by CEO Shai Weiss, the programme has seen Virgin Atlantic embrace a cost-cutting strategy, along with what the airline describes as “enhanced fleet utilisation”.
The airline has moved quickly to dump low-yield routes like Islamabad and instead focus on popular premium holiday routes like the Maldives, Dubai and Turks & Caicos.
“A loss is never satisfactory; however, our performance and results illustrate that we have made really good progress in 2023, the plan is working, and Virgin Atlantic is on course to return to profitability in 2024,” commented Weiss on Wednesday.
“2024 is the turning point for Virgin Atlantic, the culmination of our transformation, and the year we make it count.”
The turnaround is a remarkable feat for an airline that nearly collapsed at the height of the pandemic when global travel restrictions decimated its business model.
In order to secure new funding, the carrier slashed 56% of its workforce as it sought a £1.2 billion recapitalisation from investors, including Delta Air Lines, which owns a 49% stake in Virgin Atlantic.
As an illustration of Virgin Atlantic’s improved fleet utilisation, chief financial officer Oli Byers said the airline managed to operate more flights in 2023 than before the pandemic but with four fewer aircraft.
Byers said the airline was now targeting a new record for revenue in 2024.
