The Indianpost

Virgin makes long-haul business fly

A DAY after Qantas declared a $216 million annual loss on its premium international operations, Virgin Australia has finally broken even on its long-haul business, once regarded as the albatross around its neck.
After ditching loss-making routes and pursuing alliances with three airlines, Virgin’s international business – including short- and long-haul flights – reported a pre-tax profit of $22 million for the year to June, compared with a loss of $25 million previously.

But more noticeable was its long-haul offshoot, V Australia, edging into the black for the full-year after a small profit in the second half helped it overcome
In contrast, Qantas has been highlighting for months the unprofitability of its international premium operations. It is engaged in a bitter standoff with key unions over a shake-up of the business, which includes setting up a premium airline in Asia.

Shares in Virgin soared almost 15 per cent to 27¢ yesterday following the turnaround of its long-haul operations and signs the airline is winning corporate customers from Qantas.

It helped to offset a loss of $68 million for the year to June, compared with a $21 million profit previously.

The result included a $92 million hit from natural disasters, a meltdown of its reservations system late last year and disruptions to services caused by a volcanic ash cloud in June.

Despite the bottom-line loss, Virgin’s chief executive, John Borghetti, said he was committed to making the airline more appealing to corporate travellers.

The international operations had been a liability for Virgin in recent years but Mr Borghetti said turning them ”around to a profit of $20 million-plus is a good sign that we have [them] under control – this is even with the high fuel price”.

MAP Airports is keeping its options open on the way to return almost $1.5 billion to shareholders, despite investors expecting to pocket the windfall via a special dividend.

Fending off numerous questions yesterday about the most likely avenue, MAp’s top brass kept to their well-worn line that a cash amount of 80¢ per security would be finding its way to shareholders. They would not spell out whether this would be via a share buyback, a special dividend or a mix of the two.

MAp will make the cash return once it completes the exchange of its cornerstone stakes in two European airports for a bigger slice of Sydney Airport and a cash payment.

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