Virgin Atlantic looks back on 2021 as a year that was even more challenging than the first year of Covid. “Persistent volatility in international travel, fueled by ever-changing restrictions and testing requirements, resulted in significant losses and a decline in passenger numbers.” This resulted in a pre-tax loss not far away from 2020, it reported on April 5. Virgin Atlantic only looks ahead after very difficult 2021.
Virgin’s pre-tax loss before exceptional items was £594 million compared to £-659 million in 2020. The statutory loss was £486 million, down from £-864 million. The operating result or EBITDA was £-166 million versus £-260 million in the previous year. Revenues were up to £928 million from £868 million, which compares to £2.9 billion in 2019.
The UK carrier had hoped to fully recover in 2021 from the troubled 2020 when it successfully completed a £1.2 billion recapitalization and implemented £300 million in structural cost savings. But the year started off badly with rising infection cases from first the Delta variant and later Omicron, which resulted in many travel restrictions in its core markets. The biggest one, the United States, only opened up for non-US travelers in November, something celebrated by Virgin at the time. A month later, Omicron resulted in new restrictions.
Virgin Atlantic increased capacity by nine percent over 2020 and operated twenty percent more ‘sectors’ at 13.600. However, passengers carried remained flat compared to 2020, when 1.2 million passengers stepped onboard one of its aircraft. This is reflected in £410 million in passenger revenues, with another £448 million coming from cargo-only services, up by forty percent from 2020.
By the end of the year, the airline bolstered its liquidity position by raising £670 million in new capital, of which £400 million was provided by its shareholders which include founder Richard Branson and Delta Airlines. According to Chief Financial Officer Oli Byers, Virgin has a “robust” cash position of £580 million.
“My sincere thanks go to the amazing people of Virgin Atlantic for displaying the most impressive team spirit I have ever seen”, CEO Shai Weiss says in a media statement. “Together we turn our focus to the opportunity ahead and look forward to 2022 as a year of transition, from survival to recovery and on to profitability by 2023.”
Virgin plans strong return to the US
Virgin has seen strong forward bookings that in February were up fifty percent over last year. Since early March, it has increased frequencies to New York, San Francisco, and Atlanta and resumed services to Seattle and Washington. This month, a third daily rotation to Los Angeles will be activated, while Orlando features prominently on the schedule from London Heathrow, Manchester, Edinburgh, and Belfast. From May 25, Virgin will also serve Austin (Texas), its first new route to the US since 2015.
Virgin Atlantic’s current fleet consists of ten Airbus A330-300s, eight A350-1000s, and seventeen Boeing 787-9s. This autumn, the carrier will take delivery of its first A330-900, a type of which it ordered eight directly with Airbus at the 2019 Paris Airshow, with six more on lease from Air Lease Corporation. In July 2020, it deferred deliveries of both the A330-900 and the A350-1000s. It has another four -1000s to receive from the original 2016 order, plus two more that were sourced from ALC last December for delivery in 2023 and 2024.
Active as a journalist since 1987, with a background in newspapers, magazines, and a regional news station, Richard has been covering commercial aviation on a freelance basis since late 2016.
Richard is contributing to AirInsight since December 2018. He also writes for Airliner World, Aviation News, Piloot & Vliegtuig, and Luchtvaartnieuws Magazine. Twitter: @rschuur_aero.