Virgin Australia says it’s already seeing financial savings thanks to its restructure program, Better Business.
In an ASX update, the airline said the program is “already generating savings” in the 2017 financial year and is likely to contribute to net free cash flow savings increasing to $300 million per annum by the end of the 2019 financial period.
However, the airline did acknowledge that charges of Better Business combined with a soft domestic market have impacted the airline’s first quarter profits for 2017.
Virgin Australia reported that its Group’s Statutory Loss After Tax for the quarter was $34.6 million, and there was an Underlying Loss Before Tax of $3.6 million, a decline of $12.1 million on the prior corresponding period.
Despite the dip, the carrier remains hopeful and is adjusting capacity in response to the “subdued” trading market”. This saw the airline reduce Available Seat Kilometres by 0.5 per cent and total sectors flown declined 2.3 per cent on the prior corresponding period.
“The Group will continue to exercise disciplined capacity management in line with trading conditions.”
Virgin Australia
On a positive, the Group’s total revenue passengers increased by 4.8 percent and revenue load factor improved by 2.0 points on the prior corresponding period.