Virgin Atlantic Ltd has released its annual financial results for the year ending 31st December 2020. The Group, comprising Virgin Atlantic, Virgin Holidays and Virgin Atlantic Cargo, reported revenue figures of £868 million, down from £2.9 billion in 2019; a pre-tax loss of £659 million before tax and exceptional items, and fair value movements versus a loss of £22 million in 2019. These results reflect the toughest year in the airline’s 36-year history and the immense challenges that the airline industry has faced due to the Covid-19 pandemic.
Despite the incredibly tough backdrop, the company made a significant contribution towards the national effort to protect lives, from transporting vital PPE and medical supplies, to volunteering to support NHS frontline services. Virgin Atlantic Cargo enjoyed a record year, launching 12 new cargo-only routes for the first time in the airline’s history. Throughout the pandemic, the airline continued to deliver unrivalled customer service and was voted Britain’s only Five Star Airline by APEX for the fourth consecutive year in the Official Airline Ratings. In addition, Virgin Atlantic received Diamond Status from APEX for delivering the highest standards of cleanliness and demonstrating a steadfast commitment to ensuring its customers and people can fly safe and fly well.
Virgin Atlantic’s Response to Covid-19
Full Year 2020 Financial Results Summary
Shai Weiss, CEO, Virgin Atlantic commented: “2020 has been the toughest year in our 36-year history. We have taken incredibly difficult decisions, reshaping and resizing the business to reduce costs, preserve cash and crucially, to protect as many jobs as possible. At the start of 2020, we were on course to return to profitability, however, few could have predicted the scale and impact of the global crisis that the Covid-19 pandemic would bring. Ongoing travel restrictions, border closures and country-wide lockdowns reduced demand for travel and drove unprecedented levels of customer refunds, with over £600 million processed by Virgin Atlantic during 2020.
“While we welcome the adoption of a risk-based traffic light framework and that progress is being made towards the resumption of international travel at scale from 17 May, it doesn’t go far enough, given that economic recovery and 500,000 UK jobs are at stake. Now we need certainty that the framework will allow for a phased removal of testing and quarantine. With world leading vaccination programmes in both the UK and US, and evidence to support safe reopening through testing, there is a clear opportunity to open up travel and no reason to delay beyond May 17.
“With the unwavering support of our people, our creditors and shareholders, Virgin Group and Delta Air Lines, we continue to bolster our balance sheet in anticipation of the resumption of international travel from May 17th. We remain confident that Virgin Atlantic will get back to its best for our people and our customers, emerging from the crisis a sustainably profitable airline.”
Oli Byers, CFO, Virgin Atlantic commented: “Our 2020 financial results reflect the immense challenges that our industry has faced due to the Covid-19 pandemic. Aviation was one of the first industries to be affected and will be one of the last to fully recover. Since February 2020, we have been guided by the single mission of ensuring Virgin Atlantic’s survival, through a laser focus on reducing our costs, preserving cash and protecting as many jobs as possible.
“We’re proud to have completed a £1.2bn privately funded, solvent recapitalisation with the continued support of our partners and shareholders, which enabled us to strengthen our balance sheet through a £200m investment from Virgin Group, reduced five-year fleet capex spend by £880m and £335m in cost savings. In January 2021 we further supported our liquidity position through the completion of the sale and leaseback of two 787s, and on 15 March 2021, we completed financing worth £160 million, including a further £97 million of shareholder support.
“With the successful mass rollout of vaccines and the implementation of testing regimes, customers are booking for travel for Q2 2021 and beyond. Meanwhile, on the back of a record 2020, operating nearly 4,000 cargo only sectors, carrying more than 7,000 tonnes of PPE and delivering £319 million in revenues, Virgin Atlantic Cargo continues to keep global supply chains running.”