Virgin Australia revenue slumps amid pandemic

New accounts give the first glimpse of the airline’s finances under its new owners and during the pandemic.

Virgin Australia CEO Jayne Hrdlicka. Picture: NCA NewsWire / Sarah Marshall

The Covid-19 pandemic pushed Virgin Australia’s passenger revenues down more than 70 per cent for the financial year ending June 30, new filings show.

The airline, which was acquired by American private equity firm Bain Capital in November 2020, ended the year with an underlying loss of $76.8m after slashing costs by restructuring and making significant numbers of staff redundant.

The new accounts, filed with the Australian Securities and Investments Commission, are the first glimpse of how the country’s second-largest airline has operated under its new owners and during the pandemic.

They show Virgin claimed $205.4m in the JobKeeper wage subsidy in the 2021 financial year, compared to $80.5m one year earlier. Virgin’s larger rival, Qantas, claimed $856m in JobKeeper payments in the financial year.

Domestic passenger and freight revenue fell from $2.6bn in 2020 to $983.3m, while international sales fell from $966.2m to just $8m. The airline had already discontinued its budget carrier, Tiger Airlines.

In comments included in the accounts, Virgin managing director Jayne Hrdlicka said it was “unclear what the ongoing implications from Covid-19 will be for the group’s results in future financial years”.

“The group is anticipating a swift and significant ramp-up in travel demand from customers in line with border restrictions easing, and as Australians come to live with Covid-19 circulating in the community,” Ms Hrdlicka, who replaced Paul Scurrah as chief executive as part of the sale of the airline to Bain in November 2020, said.

“The group will adjust capacity in the market back up to meet this demand and is well positioned to do so … International flying continues to remain part of the group’s strategy, with international flights scheduled from December 2021 in line with reopening roadmaps announced by respective state and federal Australian governments.”

The government, however, this week announced a temporary pause to the normalisation of international travel as the Covid-19 Omicron variant remains of considerable concern.

Virgin creditors voted in favour of the Bain takeover bid in September 2020, with the company placed in administration earlier that year saddled with $6.8bn in debt as the pandemic hit.

Originally published as Virgin Australia revenue slumps amid pandemic