Virgin Australia to Post Loss for Financial Year 2013

The country’s second largest airline company, Virgin Australia, has issued another downgrade and has even advised the public that it is expected to post a financial loss of $110 Million for the year.

The company has acknowledged that it is struggling, following the implementation of the carbon tax law and the stocks’ condition in the market. The company also said it has experienced challenges with the takeover of Skywest and TigerAir Australia.

Tough competition with Qantas for domestic dominance has also been a factor to Virgin Australia’s loss, especially since the domestic market is a huge part of the company’s earnings.

Skywest meanwhile is expected to post a pre-tax loss falling below $10 million. Virgin Australia has acquired the airline last year.

Currently, the company’s efforts are concentrated on restructuring costs, which would be around $100 million. Virgin Australia is working on a system for booking and checking-in for Sabre.

Chief Executive John Borghetti expressed disappointment with the latest report but still highlighted some of the “significant progress” Virgin Australia has made, particularly with its “reinvention”.

He said, “We now have the right platform in the Australian market to generate sustainable earnings benefits.”

“Our strategic investments in Tigerair Australia and Skywest, coupled with the optimisation of Sabre and the transformation of the Virgin Australia brand and network sees us well positioned for the future.”

At the market today, shares for Virgin fell to 43 cents or at about 5.5%.