May 26, 2009 / 6:05 AM / 11 years ago

Virgin Atlantic doubles profits

LONDON (Reuters) - Privately-owned airline Virgin Atlantic said yearly profits nearly doubled, but warned the weak economic environment would make it “almost impossible” for airlines to make a profit in the current year.

In this file photo Virgin founder and chairman Richard Branson speaks at a news conference in New York March 3, 2008. Virgin Atlantic said profits nearly doubled during the year to end February, despite the high fuel prices and economic slowdown that has devastated the industry. REUTERS/Brendan McDermid

Chief Executive Steve Ridgeway echoed British Airways CEO Willie Walsh by saying a slump in passenger numbers worldwide showed no signs of abating, making the current climate the toughest the industry has faced.

“We have not seen conditions as tough as this, and we do not see any signs of recovery ... for airlines to make a profit this year is almost impossible,” Ridgeway told Reuters in an interview.

“The key now is to slow down capital expenditure and preserve cash,” he added.

Ridgeway said that while passenger numbers rose last year to 5.77 million, they would now suffer a drop as Virgin cuts flight capacity by 7 percent.

The company, controlled by Richard Branson’s Virgin Group, said pretax profits came in at 68.4 million pounds for the year to end-February, up from 34.8 million the previous year.

The results reflect a rise in the number of premium or first and business class passengers using the airline as well as its fuel hedging strategy, the group said, although Ridgeway said premium traffic across the board was now being damaged.

The figures come in sharp contrast to dire results by rival British Airways. BA said on Friday it had made a pretax loss of 401 million pounds, and saw no encouraging signs in its outlook whatsoever.

Virgin is waging a campaign against BA’s attempt to secure approval for a trans-atlantic profit sharing tie-up with American Airlines.

Ridgeway said the airline remained interested in a tie-up with bmi, if and when it is taken over by German carrier Lufthansa..

Reporting by John Bowker, Editing by Matt Scuffham and Simon Jessop

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