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Last Updated: Friday, 27 May, 2005, 09:02 GMT 10:02 UK
Profit jumps at Virgin Atlantic
Virgin chairman Sir Richard Branson
Staying ahead of the competition is the key to success, says Sir Richard
Airline Virgin Atlantic has revealed a sharp increase in profits for the year to February 2005, despite the group facing higher fuel costs.

Virgin posted pre-tax profits of 68m ($124m), its highest profit since 1999 and up from 20.9m for the 10 months to the end of February last year.

The group added that the rise came despite an extra 60m being spent on fuel as oil prices soared.

Passenger numbers also rose by one million to 4.4 million over the year.

Fuel worries

Chairman Sir Richard Branson said he was proud of the performance in a "challenging year when many leading players in the airline industry continued to struggle to survive".

Airlines have faced rising oil prices, a slow global economic recovery, overcapacity and tough competition from the no-frills sector.

Earlier this week, budget airline Easyjet warned that rising fuel costs would eat into full-year profits and that they had contributed to a 14% rise in losses to 31.2m for the six months to March.

It's always been tough but you've just got to be the best, and if you are the best in the sector you will survive
Sir Richard Branson,

Sir Richard said the introduction of fuel surcharges had offset some of the cost rises

"Rising oil prices undid some of our good work and regrettably we were left with no option but to introduce fuel surcharges from May 2004, although these only recovered around one third of the extra 60m costs we faced over the year," he said.

Chief executive Steve Ridgeway said the airline had spent a total of 300m on fuel during the year.

Turnover at the group increased to 1.63bn from 1.27bn last year, and Sir Richard added that the group's target of 10% annual growth in turnover remained unchanged.

Unique services

In a bid to retain profits and custom Virgin Atlantic introduced its new Upper Class suite, featuring the biggest flat bed in business class, which it said had helped to attract new customers.

Virgin Atlantic's upper class suite
Virgin's high tech upper class suite lured more travellers

Sir Richard told BBC News that the industry had become "much tougher".

"It's always been tough but you've just got to be the best, and if you are the best in the sector you will survive," he added.

"You've still got to have things like bars and massages which has made us very special and helped us survive."

Meanwhile, the group's tour operator, Virgin Holidays boosted its turnover to 407m from 314m last year.

As well as launching flights to Australia in December, the company said it would launch Virgin Nigeria - a national airline - in three weeks' time.




Puffbo
SEE ALSO:
US export rules frustrate Virgin
02 May 05 |  Technology
Branson in India-wide flights bid
31 Mar 05 |  South Asia
Virgin soars towards new frontier
27 Dec 04 |  Science/Nature
Virgin wins most Indian flights
03 Dec 04 |  Business
Virgin and SN seal Belgian merger
06 Oct 04 |  Business
Virgin takes to Nigeria's skies
28 Sep 04 |  Business


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