Biz Briefing: Virgin Atlantic's £100m Upgrade

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Biz Briefing: Virgin Atlantic's £100m Upgrade

Unread post by bimjim » Wed Aug 10, 2011

http://news.sky.com/home/business/article/16047114

Biz Briefing: Virgin Atlantic's £100m Upgrade
Wednesday August 10, 2011

Virgin Atlantic has returned to annual profit, despite disruption caused by the volcanic ash cloud from Iceland.

It made a pre-tax profit of £18.5m last year as revenues rose 13% to £2.7bn, following losses of £130m in the previous 12 months.

Sir Richard Branson's airline is now planning to invest £100m improving operations in the air and on the ground, with new aircraft and additional services to the Caribbean and Ghana which will create 1,000 jobs.

The company is also doubling its UK retail stores to 120, creating 200 jobs nationwide, at a time when many rivals are shifting services online.

Virgin argues customers benefit from face-to-face help while booking holidays.

But Chief executive Steve Ridgway said: "Since the turn of the year, market conditions have become tougher, with increased capacity, faltering consumer confidence and high fuel prices.

"We are also seeing softer trading in the areas that are hit hardest by the continued rises in Air Passenger Duty, particularly the Caribbean routes and premium economy cabins.

"While business traffic remains strong, demand in the economy cabin is more
challenged."

The improvement is credited to growth in its UK and Nordic businesses, the later Easter this year and the lack of disruption from volcanic ash.

However, the unrest in North Africa did hit its French tour operators.

Only last week, the CEO of rival company Thomas Cook stepped down, after three profit warnings and a major fall in its share price.

It made £262m in the six months to June, thanks to an increase in people saving and higher revenue from fees.

Analysts had expected just over £193m.

The company's long-term savings business saw a rise of 16% to £11.2bn.

The unit, which has total assets of just over $30bn, had been the subject of a wider strategic review as Europe's top bank looks to streamline its mammoth operations.

Chief Executive Stuart Gulliver is looking to make savings of about $3.5bn and concentrate on more profitable markets.

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