Virgin Atlantic has reported a pre-tax loss of £659 million for 2020, following what it described as “the toughest year in the airline’s 36-year history”.
The figures compares to a loss of £22 million in 2019, with total revenue falling from £2.9 billion in 2019 to £868 million last year.
Virgin said it had “responded swiftly” to the Covid-19 crisis, suspending flights to Shanghai back in February 2020 and “immediately shifting focus to liquidity preservation”.
Actions included establishing a cargo-only business, consolidating operations at Heathrow, and accelerating the retirement of its B747-400 and A340-600 aircraft. The carrier was also forced to reduce its workforce by 41 per cent “in order for the airline to emerge from the crisis”.
Virgin also pointed to a £1,2 billion privately funded solvent recapitalisation of the airline in September 2020, which has been followed by two further financing transactions raising an additional £330 million.
Passenger numbers fell by 80 per cent year on year, as lockdowns and travel restrictions forced the carrier to suspend routes for a large part of 2020.
Commenting on the news Shai Weiss, CEO, Virgin Atlantic, said:
“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.”
Last month Virgin Atlantic joined British Airways and Heathrow airport in calling for the UK government to reopen transatlantic travel.