Virgin Blue posts loss, freezes pay for managers
Virgin Blue Holdings Ltd.
Virgin Blue Holdings Ltd. reported a loss in the first half, prompting Australia’s second-biggest airline to freeze pay for senior managers and confirm cuts to its workforce of as much as 400 full-time jobs.
The net loss was A$101.4 million ($65 million) in the six months ended Dec. 31, compared with a profit of A$113.3 million in the same period a year ago, the company said in a statement to the Australian stock exchange today.
Brisbane-based Virgin Blue last week said it would cut domestic capacity and will eliminate some positions in response to a forecast deterioration in domestic demand.
Underlying profit before tax totaled A$60 million for the period, the airline said. The underlying profit excluded a A$60.6 million after-tax investment in V Australia and an A$80.8 million expense relating to ineffective fuel and currency hedges.
“Our underlying business remained resilient despite an exceptionally challenging and historically unprecedented operating environment,” Chief Executive Officer Brett Godfrey said.
To cope with an expected drop in demand, the airline said it’s removing capacity of as much as 5 aircraft from its Australian domestic routes by May 1. General managers and the executive management team have also committed to reducing their annual cash compensation by 20 percent to 30 percent.
A further A$40 million in savings have been identified and targeted for the second half of this fiscal year, the carrier said.