Olympics partly to blame for Virgin Atlantic’s deepening losses

Virgin Atlantic, a UK-based airline, has partly blamed the 2012 London Olympic Games for its latest reported losses.

Sir Richard Branson’s company has reported a loss of £93 million for the last financial year, adding to the £80 million deficit that it reported for the previous year. The airline’s new chief executive, Craig Kreeger, said that a dent in business travel that was partly due to the effect of the Olympic games had impacted on the figures, although he was optimistic for the future, forecasting a return to profitability for the company within two years.

Kreeger said, ‘Last year saw a double dip recession, a continued weak macro economy, and an Olympic Games which, although a fantastic event, severely dented demand for business travel. Despite these challenging circumstances, the enduring strength of the Virgin Atlantic brand has not wavered – we have increased our revenues, our load factors, and carried many more passengers than the previous year.

I am confident we have concrete plans in place to take Virgin Atlantic forward and return the business to profitability within a two-year time frame. The commitment of our staff and loyal customer base is not to be overlooked and as a brand with high advocacy we will continue to innovate and inspire in true Virgin spirit.’

The group’s revenue did see an increase of 5 percent, to £2.87 billion, and it registered a 3.5 percent increase in passenger numbers to 5.5 million.

Virgin Atlantic is implementing a number of measures to reverse its fortunes, including the recent launch of new domestic airline, Little Red, and cuts to its administrative operations.