April 10, 2019 / 12:07 PM / 8 days ago

Virgin Atlantic targets profit in 2021 after second annual loss

(Reuters) - After reporting a loss for two straight years Virgin Atlantic is targeting a return to profitability in 2021, helped in part by the launch of new routes and its acquisition of British regional airline Flybe.

FILE PHOTO: A Virgin Atlantic Airbus comes in to land at Heathrow aiport in London, Britain, June 25, 2018. REUTERS/Toby Melville/File Photo

Passenger volume for the carrier rose nearly 5 percent in 2018 and revenue per customer gained 1.7 percent at a time when European airlines like easyJet were seeing a drop in demand due to Brexit related uncertainty.

However, Virgin Atlantic on Wednesday reported a pretax loss of 26.1 million pounds ($34.12 million) and blamed economic uncertainty, higher fuel costs due to a weaker pound and problems related to Rolls-Royce Trent 1000 engines used in its Boeing 787 jets.

The pound fell 5.6 percent against the U.S. dollar, in 2018 as Britain contended with the political and economic uncertainty generated by negotiations on Britain’s exit from the European Union.

The airline, the 1980s brainchild of British billionaire Richard Branson, fell into the red in 2017 after three years of profits, as competition intensified and fuel costs rose.

For a graphic on Virgin Atlantic's performance in the last decade, see - tmsnrt.rs/2VAjQDH

The aviation industry has also been thrown into chaos by the global groundings of Boeing’s new 737 MAX planes after a second fatal crash in six months, prompting profit warnings.

Chief Executive Officer Shai Weiss said while Virgin Atlantic does not fly any 737 MAX planes, it did not benefit from any added business due to the grounding of these planes by competitors.

Best known in Europe for the trans-Atlantic planes it flies with Air France-KLM and Delta, Virgin is pushing hard to become profitable, Weiss told reporters on a call.

“Everything we’re doing is meant to yield to that (profitability) crescendo.”

Weiss also said Virgin had three planes that will require increased inspection due to troubles with Rolls-Royce’s Trent engines.

Rolls-Royce on Wednesday agreed to an early inspection of some Trent 1000 TEN engines by regulatory authorities.

Virgin Atlantic’s finance chief Tom Mackay said that while economic factors would continue to challenge the carrier in the year ahead, it was in a strong cash position.

For an interactive graphic on Virgin Atlantic, click here - tmsnrt.rs/2WTFDX4

Reporting by Noor Zainab Hussain and Pushkala Aripaka in Bengaluru; Editing by Anil D'Silva

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