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Virgin Blue eyes ultra low cost
BRISBANE – Virgin Blue has confirmed that the Australian carrier continues to examine business models for an ultra-low cost carrier.
Chief executive Brett Godfrey made the announcement today when Virgin Blue revealed that it had doubled net profit for 2006-07 after tax to A$216 million (US$173m).
AAP reported that the result included A$232 million of one-off expenses related to the introduction of its new fleet of 20 Embraer regional jets, the start up of international carrier V Australia and a write-off for a cancelled reservations project.
“It is the strong performance we were aiming for, and progress at the rate planned, under our New World Carrier strategy,” said Godfrey.
Godfrey said the next 12 months would be a period of steady expansion for the group’s three airlines as it enters the New Zealand domestic market for the first time, expands its Australian domestic network and launches a fourth airline, V Australia, to undertake long-haul international operations.
“Preparations for the launch of trans-Pacific operations will escalate and subject to completion of the remaining regulatory requirements, V Australia will inaugurate Boeing 777-300ER international flights to the USA in the second half of 2008,” Virgin said.
Virgin said that during this planned development phase the company would accommodate a period of controlled increase to the cost base.
“Management view this transitional adaptation of business model as short-term investment prior to entering higher yielding domestic and international markets,” the company said.
“Virgin Blue continues to examine business models for an ultra-low cost carrier.”
Virgin also said it was confident of continued strong revenue and yield improvement supported by further penetration of the corporate travel market, entry to the New Zealand domestic market and progress in the government travel sector.
Virgin said that it had continued to implement its hedging policy and for the 2008 full year had in place currency hedging covering 77 per cent of its requirements and fuel hedging covering 49 per cent of fuel requirements.
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