Business

Virgin Australia first-half losses narrow on oil slump

Virgin Australia plane Image copyright AFP
Image caption Virgin Australia is majority owned by Singapore Airlines, Air New Zealand and Etihad

Virgin Australia saw its losses narrow to A$47.8m ($37.3m; £24.2m) in the six months to December because of lower oil prices and a cost-cutting programme.

Revenue rose by 6% to A$2.38bn from a year earlier.

Australia's second-largest carrier has also benefited from a truce with rival Qantas following a bruising domestic price war.

Virgin Australia said it now expects an improved performance in the second half of the financial year.

Chief executive John Borghetti said in a statement that "good momentum is building in our domestic business, which accounts for around 75% of our total business".

"Based on Virgin Australia Group's current hedging position and market rates, the Group expects to see further benefit in the second half of the 2015 financial year," he said.

However, many analysts still expect it to post a third consecutive annual loss in 2015.

Virgin Australia launched in 1999 as a budget carrier travelling between Sydney and Melbourne before converting to an international airline in 2011.

The carrier is majority-owned by Singapore Airlines, Air New Zealand and Etihad Airways, which together hold a 73% stake. Virgin founder Richard Branson holds a 10% stake.

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