Relaunching services on desired routes, settling into new code share arrangements, introducing inflight wi-fi & upgrading plane seats have contributed towards building ‘Better Business’ over at Virgin Australia.
The airline group released its 2016/17 financial results this morning and as promised last month, it was mostly good news with positive cash flow, stabilised passenger revenue and financial improvement.
Less than a few weeks after being named ‘Best Domestic Airport‘, Virgin Australia is practically winning once again, after reporting that its Group Statutory Loss After Tax was sitting at $185.8 million, an improvement of $38.9 million on the prior year.
According to the Group, this multi-million drop in losses after tax was delivered by its three-year Better Business program, which is in its first year of reducing cost base, enhancing cash flow and improving capital position.
The Better Business program is doing so well for the company that Virgin Australia Group’s Chief Executive, John Borghetti, said he’s increasing the expected overall savings target by an extra $50 million per annum.
So in total, Virgin Australia Group’s Better Business program is expected to deliver around $350 million in annualised net free cash flow savings every year by the end of the 2019 financial year.
In the meantime, the Aussie company is celebrating its first positive cash flow since 2012, with $34.3 million, an improvement of $126.4 million on FY16.
Then there’s the Financial Leverage, which delivered a 40 percent improvement on 2014 financial year, while the Net Debt reduced by $839 million.
When it comes to passenger revenue, the Group made $24.1 million for the full financial year, up 1.9 percent on the prior 12 months. This was driven by a 6.1 percent growth in Virgin Australia’s international passenger revenue and a 10.7 percent jump in Tigerair’s passenger revenue.
Borghetti welcomed the positive results, saying the Group maintained strong focus on improving its balance sheet and the customer experience.
Looking ahead, the Chief Executive said that the Virgin Australia Group will continue working towards supporting future earnings and delivering long-term value for shareholders in the 2017/18 financial year.
This includes consolidating the company’s position in the domestic market and leveraging new opportunities in Asia and the North American markets.