Virgin Atlantic yesterday shared its financial results for 2020. As expected, due to the conditions of the pandemic, figures are down compared to 2019. Altogether, revenue is approximately three times lower year-on-year.
Dire numbers
Across Virgin Atlantic, Virgin Holidays, and Virgin Atlantic Cargo, the reported revenue for the year is £868 million (~$1.2 billion). While this figure might seem like a lot, this is down from £2.9bn (~$4.01bn). Along with this, the airline has reported a pre-tax loss of £659m (~$911m) "before tax and exceptional items, and fair value movements” against a loss of £22m (~$30.4m) the year before.
Notably, Virgin Atlantic has been going through a billion-dollar restructuring plan. This privately funded plan was completed in September 2020 and was based on borders opening in time for spring 2021. With the aviation industry still heavily restricted in the new year, the airline has also been in talks this year about a £160 million (~$223m) support package with its shareholders and creditors, which followed a $230 million financing on two Boeing 787s.
Hope for the future
The airline previously stated that it looks to expects to return to profitability in 2022. Until then, it is confident that it has sufficient liquidity to trade through until restrictions ease and passenger activity increases. Nonetheless, 2020 has been Virgin Atlantic’s most challenging year.
“At the start of 2020, we were on course to return to profitability, however, few could have predicted the scale and impact of the global crisis that the Covid-19 pandemic would bring. Ongoing travel restrictions, border closures and country-wide lockdowns reduced demand for travel and drove unprecedented levels of customer refunds, with over £600 million processed by Virgin Atlantic during 2020,” Virgin Atlantic CEO Shai Weiss shared in a statement.
“While we welcome the adoption of a risk-based traffic light framework and that progress is being made towards the resumption of international travel at scale from 17 May, it doesn’t go far enough, given that economic recovery and 500,000 UK jobs are at stake. Now we need certainty that the framework will allow for a phased removal of testing and quarantine.”
Virgin reportedly wants a travel corridor between the United Kingdom and the United States from the middle of next month amid the launch of the traffic light system. The carrier cites the strong vaccination rollout in both countries and reliable testing as key factors in reopening travel between the two nations.
Regardless, with a relatively busier period expected this summer, the airline is confident that it will bounce back. Altogether, it is looking forward to coming out of the crisis as a sustainably profitable carrier.
Showing its commitment
Despite the financial hardships, Virgin is still keen on helping out amid the ongoing struggles of the pandemic. It is one of several airlines assisting with the medical emergency in India. This weekend, the company is helping with the transport of 200 boxes of oxygen concentrators to Delhi. Moreover, it is donating cargo space in other planes going to the country to the Red Cross.
Virgin has been no stranger to helping out around the world since the rise of the pandemic. It has ferried crucial PPE and medical supplies and has volunteered with the NHS throughout the period.
Ultimately, Virgin will be keeping a close eye on which countries will be on the government’s red, amber, and green travel lists. This system is expected to go ahead as early as May 17th.
What are your thoughts about Virgin Atlantic’s figures? What do you expect from the period ahead? Let us know what you think in the comment section.