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Airlines

UPDATE 1-Virgin Australia full-year loss widens on restructuring charges

(Recasts on FY result)

SYDNEY, July 28 (Reuters) - Australia’s No. 2 airline Virgin Australia Ltd said on Thursday its full-year net loss more than doubled from a year ago, hurt by the one-off costs of a restructure to cut capacity amid stiff competition.

Sydney-listed Virgin posted a net loss of A$224.7 million ($169 million) for the year to June 30, compared with a A$93.8 million loss in 2014/15.

The Richard Branson-backed airline, which competes with larger Qantas Airways Ltd, is cutting capacity, taking on a new major shareholder, eyeing flights to China and seeking to raise capital to help shore up its margins.

Its fourth-quarter and annual results released on Thursday included previously announced charges related to efficiency initiatives “with a focus on the simplification of the group’s fleet through the removal of surplus” capacity and aircraft.

Without the one-off charges, Virgin said, annual pre-tax profit was $41 million, better than the previous year’s A$49 million pre-tax loss and within guidance it gave this month of posting underlying profit between A$30 million and A$60 million.

“The group improved its underlying performance, passenger numbers and load factors in the fourth quarter in a challenging operating environment,” chief executive John Borghetti said in a statement.

“During the quarter, the group took action in response to operating conditions through strategic capacity reductions in line with demand.”

In the fourth quarter, Virgin said it slashed international seating capacity by 18.2 percent, while it cut domestic seating capacity by 2 percent.

The company is scheduled to publish detailed full year results on Aug. 5.

Virgin shares were trading steady while the overall market was up 0.3 percent.

$1 = 1.3294 Australian dollars Reporting by Byron Kaye; Editing by Richard Pullin

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