Virgin Australia.
Virgin Australia. Trevor Veale

Gladstone flights won't be affected in Virgin's downsize

VIRGIN Australia's regional routes could be at risk after the $18.6m loss in the third quarter of the 2016 financial year.

But, luckily for Gladstone passengers, the services in our city will not be on the chopping block.

By the fourth quarter of 2016 Virgin Australia Group's capacity will be reduced by 5.1%, including domestic reductions.

Virgin Australia Group CEO John Borghetti said a one-off increase of revenue from the Cricket World Club, and the changes to Easter and school holiday dates in some states were some factors that contributed to the loss.

"While the group improved its underlying performance in this quarter, it was against a challenging operating environment," Mr Borghetti said.

"This environment has been impacted by weak consumer demand and sentiment, uncertainty around the federal election and the resources sector downturn."

The airline had previously announced it would sell all eight of its Fokker 50 aircraft.

The third quarter loss was better than the $22 million loss in the year earlier period.

Virgin now expects to report a total underlying profit before tax of $30m - $60m this financial year.

Prior to this latest report, in April Virgin Australia was considering cutting some Gladstone flights, however the company is yet to confirm how many flights this will affect.

There will be no further changes to the capacity on Gladstone services, in the next round of reductions.

At a glance:

The underlying loss before tax of $18.6m was an improvement of 16.2% from last year's results, with the group delivering a year to date underlying profit before tax of $62.9m. 

In the fourth quarter of 2016, Virgin Australia Group capacity will be reduced by 5.1%, with domestic reductions due to ongoing weakness in consumer demand and the resources downturn.

 



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