Virgin Australia Q2 earnings slide 37% in tough market

SYDNEY: Virgin Australia Holdings Ltd on Friday posted a 37% fall in second-quarter underlying earnings before taxes as tough conditions persisted in the domestic aviation market.

Australia's second-biggest airline reported an underlying profit before tax of A$45.9 million for the quarter ended Dec 30, compared with A$73 million a year earlier.

On a statutory basis, including restructuring charges associated with a cost-savings programme, it reported a profit before tax of A$13.1 million.

The second quarter is typically the most profitable of the year for the airline. Virgin will report first-half results later this month, but the figure released on Friday indicates underlying earnings of A$42.3 million before tax given it lost $A3.6 million in the first quarter.

Virgin in November said it would "actively manage" capacity due to subdued conditions in the domestic market, where it competes against Qantas Airways.

Virgin's domestic capacity rose by 1.6% in the quarter ended Dec 31, but it cut the number of flights by 5% as it removed E190 aircraft from its fleet. That meant some flights had been switched to larger Boeing 737 aircraft.

The airline did not comment on the performance of its international division. - Reuters