Virgin beats rival BA with rising profits

AIRLINE Virgin Atlantic, controlled by Richard Branson’s Virgin Group, saw its pre-tax profit almost double to £68.4m in the year ending February – trouncing British Airways (BA), which last week announced record losses.

Virgin said profits were boosted by an increase in premium travel. It is taking market share from rivals, including BA, in the high-margin business and first-class end of the market.

Virgin Atlantic sales rose 8.4 per cent during the year to the end of February to £2.6bn, compared to £2.4bn in the previous year.

Branson praised his staff for the “excellent achievement” despite the tough trading environment and volatile oil prices, which have heaped pressure on airlines globally. In the previous year, pre-tax profits at the airline were £34.8m.

The Virgin results were far better than those of its nearest rival, BA, which last week reported a full year loss of £401m.

But analysts warned of a bumpy ride for Virgin this summer, despite the strong full year results, pointing out the last quarter of the airline’s financial year was turbulent.

Branson himself used the bumper profits to relaunch the battle between Virgin and BA over the former’s proposed tie-up with American Airlines (AA). He said that plans by BA and AA to “effectively merge” were anti-competitive.

The Department of Transportation will rule on BA’s and AA’s plans to join forces on highly-lucrative transatlantic routes by the end of October.