Virgin Atlantic hits out at Heathrow ‘failings’ as high costs delay post-pandemic recovery
Virgin Atlantic said today that challenges surrounding last years passenger cap at Heathrow and ongoing economic uncertainty affected its final year results, with the airline not expecting to return to profit in 2023.
In its 2022 full year results, the airline highlighted “industry wide challenges,” such as July’s 100,000 passenger limit introduced at Heathrow and said that persistent inflation had contributed to losses.
“The devastating war in Ukraine dramatically affected fuel and energy prices and global supply chains. In parallel, inflation stoked a cost-of-living crisis, particularly felt by UK consumers as energy prices rocketed. These factors contributed towards losses, albeit significantly improved on 2021,” Shai Weiss, Virgin Atlantic’s CEO, said.
But Weiss added that, as demand begun to return last year, “failings at Heathrow and the complexities of ramp up pushed our operation to its limits.”
It reported total revenues of £2.9bn in 2022, recovering to 98 per cent of 2019, and underlying pre-tax earnings of £310m. Pre-tax losses were at £206m.
As new routes opened up last year, the group saw passenger numbers get closer to pre-Covid levels, reaching 75 per cent of the level achieved in 2019.
But the airline said that it does not expect to reach profitability until 2024 despite a recent uptick in demand for summer holidays.
Victoria Scholar, head of investment at Interactive Investor said that while the post-pandemic rebound in international travel has boosted ticket sales, “this tailwind is being offset by inflationary pressures.”
This, she said, suggests”Virgin Atlantic is lagging rivals like British Airways’ parent company IAG in terms of bottom-line performance.”
“While there were rumours of an IPO in 2021, it looks like that is no longer happening anytime soon,” she added.