Virgin Australia expects its finances to have taken a bit of a hit over the last 12 months due to the cost of the its three-year ‘Better Business’ restructure designed to reduce debt.
In a quarterly update, which also addressed the carrier’s full year results scheduled to be released next month, Virgin revealed $224.7 million statutory loss after tax for FY16.
Virgin has been upfront about its expected losses over the last few months, saying the charges related to the Better Business program and “other efficiency activities” would prevent the carrier from seeing the benefits of its efforts until 30 June 2019.
The restructure includes the sale of Virgin’s fleet of E190 aircraft over the next three years to save on fuel and crew costs. The A320s currently being used by Tigerair will also be sold off and replaced with Boeing 737-800s.
Meanwhile, Virgin is expecting to post a $144.7 million improvement on its group underlying EBIT profit as well as a $90.1 million increase in underlying profit before tax to $41 million.
The airline’s business received a bit of a boost during the last quarter compared to the same period last year, with a $26.7 million increase in group underlying EBIT profit and a $15 million rise in nderlying profit before tax.
John Borghetti, Virgin Australia CEO, said the increase in underlying performance, passenger numbers and load facts came despite “a challenging operating environment”.