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Australian Times


Shareholders Still Behind Virgin Australia Despite Huge Loss

August 30, 2013 by rochelle in Business with 0 Comments

Three of Virgin Australia’s very important shareholders are still supporting the company, even as it reported that the airline has suffered a huge $98 Million loss for this financial year.

Shares for Virgin remained flat at 40.5 cents, as it tries to downplay worries by highlighting that its operating cashflow still stands at $184 million, with a total cash position at $581 million when June ended.

Loss was massive, but revenue increased from $3.9 Billion to $4.02 Billion.

The loss was due to the challenges in operations within the industry, with many other airline companies in competition, as well as carbon tax and changes in the booking system. The company also still reeling from the deal with Skywest, which the company has bough from West Australia at the beginning of the year.

Virgin Australia’s Chief Executive said that the company is facing a “very difficult economic environment and intense competition”, but also acknowledge that much of their focus this year was on reshaping its system.

He said, “We now have the right structure in place to compete vigorously in all key market segments and achieve sustainable performance in the future.”

The company have also advised its shareholders several weeks prior, that it could experience a record loss.

It is planning on reviewing its assets, such as the sale and leaseback of its hanger located at Brisbane, to ensure that its resources are utilised better.

The chief said, “This includes conditional commitments for a new term loan facility from Air New Zealand, Etihad Airways and Singapore Airlines for an aggregate amount of $90 million, as part of our focus on supplementing and diversifying the Company’s liquidity position.”

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