British airline Virgin Atlantic said on May 26 that profits almost doubled in 2008-2009, in contrast to a large annual loss at rival British Airways and despite choppy oil prices and a fierce recession.
Pre-tax profits rocketed by 96.5 percent to 68.4 million pounds (78 million euros, 108 million dollars) in the 12 months to the end of February, compared with 34.8 million pounds in its 2007-20008 financial year.
Group sales, including tour operator division Virgin Holidays, increased 8.4 percent to 2.579 billion pounds, the company said in a results statement.
Virgin was boosted by strong demand for premium travel and its "hedging" policy to bet against volatile oil prices. Airlines seek to protect themselves against oil price moves by taking defensive positions on futures markets. "The strong results reflect an increase in the number of premium travellers choosing the airline, as well as prudent management decisions taken during the most volatile trading conditions in the airline's 25-year history - where oil prices peaked at 147 dollars per barrel and subsequently dipped as low as 38 dollars," Virgin said in a statement.
The group added that it carried 5.8 million passengers in the past year despite a recession in home market Britain. Virgin Atlantic, which is not listed on the stock market, is 51-percent owned by tycoon Richard Branson. Singapore Airlines owns the remaining 49 percent.
The group spent nearly 1.0 billion pounds in fuel costs in 2008-2009. Jet fuel, or kerosene, is refined from crude oil. "The last financial year has proven to be the most volatile yet in our 25-year history," said Branson.
"To increase profits against a backdrop of such a severe recession is an excellent achievement by all of our staff." Virgin Atlantic, which celebrates its 25th birthday next month, has a fleet of 38 planes and 8,500 staff.
BA posted a pre-tax loss of 401 million pounds for 2008-2009 and blamed high fuel costs and slumping demand. "After BA's crash landing last week it comes as some surprise that Virgin Atlantic is flying high," said Mark Priest, senior trader at ETX Capital.
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