Tuesday, August 7, 2012

Virgin Cargo Hits New High Despite Some Global Freight Doldrums

Revenues Jump in Most Markets Despite Uncertainty
Shipping News Feature

UK – WORLDWIDE - Virgin Atlantic Cargo yesterday reported an increase in revenue for the 2011/12 financial year despite difficult trading conditions. A 7% year-on-year growth to £239.6 million represents the best financial performance of the air carriers cargo division in its twenty eight year history. The result was driven by an increase in yield of 12%, with overall tonnage down by 5% year-on-year. Performance was strong both in the Europe, Middle East and Africa and the Americas regions, each reporting increases in revenue of 13% and 15% respectively over the twelve months. However, given the challenging conditions of the freight market and lack of a traditional peak season in some Far East locations, revenues from the Asia-Pacific region declined by 7% in 2011/12 compared to the previous year.

Virgin Atlantic Cargo’s revenue from joint venture partners, notably its partnership with Virgin Australia, continued to perform strongly, up by 25% thanks to significant increases in tonnage and yield. Freight volumes on Virgin Australia’s transpacific operations from the United States to Australia contributed to the performance. Chief executive of Virgin Atlantic, Steve Ridgway said that he is proud of the Virgin Atlantic Cargo team for delivering another great contribution to the airline in a difficult and challenging market. John Lloyd, Director of Virgin Atlantic Cargo, added:

“What marks this result as particularly significant is that it was achieved in the context of both a marginal decline in our share of capacity and in a year when total market volumes failed to grow. At the root of our second successive year of record cargo revenues was a series of internal initiatives designed to improve our efficiency. A five per cent increase in our yield premium and substantial improvements in our cost base represent the fruits of our efforts and underpin another tremendous result.”

The Virgin Press release revealing the above figures fails however to mention profits as opposed to revenue, or turnover thus whilst the company is keeping its bankers happy shareholders will be more interested in the bottom line. The last figures we have access to show the company turning a record £132 million loss in 2009-2010 into a pre-tax operating profit of £18.5 million in the 2010-2011 financial year (to February 2011).

Photo: Virgin Director John Lloyd