Regional routes to be affected by fleet restructure.
Virgin Australia has just released a trading update for the quarter ending 31 Mar, with a statutory loss after tax of $58.8 million – a decline of $30.5 million on the previous corresponding period.
CEO John Borghetti said the “underlying loss before tax” was $18.6 million, representing an 16.2% improvement. However the bottom line was hit by restructuring charges due to fleet initiatives including “removal of surplus ATR capacity due to the resources downturn”.
“While the group improved its underlying performance in this quarter, it was against a challenging operating environment. This environment has been impacted by weak consumer demand and sentiment, uncertainty around the federal election and the resources sector downturn,” he said.
Accordingly VA will reduce its overall group capacity by 5.1% in the current quarter, with domestic reductions focused on regional routes.
Borghetti said the restructuring charges plus further initiatives to come “will provide us with significant cost savings going forward”.
More information in today’s issue of Travel Daily.