Strong demand from holiday makers has put Richard Branson's Virgin Atlantic on course for a return to profitability in the current year as those airlines which made it through the Covid pandemic benefit from less capacity across the market.
The airline, which began operating international flights out of Edinburgh at the end of 2021, reported a narrower loss for 2023 as revenues hit a record £3.1 billion. Chief executive Shai Weiss said the carrier is continuing to capitalise on "strong demand for leisure air travel and holidays".
Meanwhile, budget carriers Wizz Air and Ryanair have reported a rise in passenger numbers during March. Both are expected to further benefit from the resumption of flights to Israel which were suspended at the start of the war in Gaza in October.
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“Wizz Air and Ryanair reported a material increase in passenger numbers in March with the former helped by flights to Israel restarting despite the ongoing conflict in Gaza," said Russ Mould, investment director at AJ Bell. "The company also expects a boost from the Euros football tournament kicking off in Germany this summer.
“The travel sector has enjoyed an impressive recovery post-Covid with airlines boosted by some capacity coming out of the market as less financially robust companies were forced to exit. The key question now is: how long will travellers continue to stomach higher prices in order to jet away?”
Virgin Atlantic, which will mark its 40th anniversary in June, reported an adjusted pre-tax loss of £139 million for 2023 compared to a loss of £206m in the previous year. Chief financial officer Oliver Byers said the continued losses were largely due to interest charges incurred on loans taken during the pandemic, as well as £100m of debt repaid to lenders in 2023.
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The airline, which is 49% owned by Delta of the US, carried 5.3 million passengers last year with an average load factor of 77% and a 16% increase in capacity due to bigger aircraft. It hopes to return to pre-Covid levels of six million passengers this year, boosted by a number of new routes and a resumption of services to Dubai.
Corporate travel, which unlike leisure has not fully recovered since the pandemic, dipped towards the end of 2023 but is looking stronger this year and is trending up to around 80% of pre-pandemic levels.
"A loss is never satisfactory; however, our performance and results illustrate that we have made really good progress in 2023, the plan is working, and Virgin Atlantic is on course to return to profitability in 2024," Mr Weiss said.
He added that this will be a "turning point for Virgin Atlantic, the culmination of our transformation and the year we make it count”.
Elsewhere, Ryanair said it flew 183.7 million passengers during the 12 months to the end of March, 9% than the 168.6 million who travelled with the Irish carrier in the previous financial year.
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Ryanair had originally predicted it would carry 185 million passengers in its 2023/24 financial year, but cut that to 183.5 million last autumn after manufacturer Boeing delayed the delivery of new aircraft. Further delays from Boeing Further have prompted Ryanair to reduced forecasts for the current financial year to between 198 million and 200 million passengers, down from 205 million originally.
The airline filled 94% of the seats on its aircraft last year, one percentage point ahead of the 93% sold in the previous 12 months.
Wizz Air reported a 12% year-on-year jump in passenger numbers during March to nearly 4.8 million people as it restarted flights to Israel.
The FTSE 250-listed airline resumed flights to Tel Aviv from six European bases in early March and plans to reopen additional routes in April, May and June. Ryanair resumed flights to Israel's Ben Gurion airport at the start of February but suspended them again at the end of the month after a dispute over which terminal it could use.
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