Financial Report: Virgin Atlantic Records Revenue of £2.9 Billion

Virgin Atlantic has released its annual financial results for the year ending 31st December 2022. The results reflect 2022 being a year of recovery and ramp up for Virgin Atlantic as the Covid-19 related challenges were overtaken by a surge in customer demand for travel.

Virgin Atlantic reported total revenue of £2.9 billion, recovering to 98% of 2019’s revenues; an underlying EBITDA of £310 million; and a loss of £206 million before tax and exceptional items. Underlying EBIT of £71m returned to pre-pandemic levels of performance (2019: £71m).

In 2022, Virgin Atlantic capitalised on the recovery in customer demand for air travel, holidays, and the continuing demand for air freight. With revenue tracking ahead of expectations and maintaining the benefit of £300 million annual cost saving achieved in response to the pandemic, statutory losses were significantly narrowed from a combined £1.4 billion incurred during the pandemic years of 2020 and 2021. Virgin Atlantic ended the year with a robust cash position of £399 million.

2022 was the first year of the airline’s four-year plan supporting its mission to become the most loved travel company and sustainably profitable. The 2022 financial and operational results demonstrate that the airline’s plan is working and sets up 2023 as a year of delivery and a return to profitability in 2024.

Full Year 2022 Financial Results Summary

• Disciplined capacity management, ensuring only cash contributing flights were flown resulted in operating 21,835 sectors, up 61% vs 2021 and at 93% of 2019

• Despite the industry wide challenges of ramp up and capacity restrictions at London Heathrow, a focus on operational excellence delivered a completion factor of 99.5%

• Passenger capacity (ASKs) increased 178% vs 2021 and passenger numbers increased 297% vs 2021, both recovering towards pre-pandemic levels at 81% and 75% of 2019 respectively

• The lifting of international travel restrictions in early 2022 saw a resurgence in confidence and demand for travel. Passenger revenue increased five-fold vs 2021 to £2.1bn and returned to pre-pandemic levels. On a quarterly basis, Q3 and Q4 recorded total airline revenue at 108% and 109% of 2019 levels respectively reflecting the sustained demand for travel

• Passenger unit revenue (PRASK) grew to 5.26p, up 23% vs 2019. The airline delivered record PRASK performance in six months of the year, combining a return to pre-pandemic load factors with double-digit growth in passenger yields

• Virgin Atlantic Holidays also benefitted from the resurgence in travel demand, with 250k customers generating revenues of £487m, 78% of 2019 levels

• Virgin Atlantic Cargo operated 1,117 cargo dedicated sectors and delivered revenue of £377m, 75% above 2019 and surpassing expectations

• Continued focus on cost discipline resulted in total airline non-fuel costs of £1.5bn, down £173m on 2019, reflecting the impact of £300m annual cost initiatives, fully delivered in 2020 and 2021

• Virgin Atlantic recorded a full year underlying EBITDA of £310m, up £471m vs 2021 and recovering to 92% of 2019, an underlying EBIT of £71m, in line with 2019, an underlying loss of £206 million before tax and exceptional items, £391m improved vs 2021 and a statutory loss of £342m, £144m improved vs 2021

• Virgin Atlantic ended the year with a strong cash position of £399m and is set up for a year of delivery in 2023, having paid down £92m of debt and purchased three slot pairs at London Heathrow.

Despite the impact of Omicron on the first three months of the year, 2022 marked the first year of recovery from the pandemic, in tandem with the recovery in passenger demand and Virgin Atlantic’s financial performance, for a 6th consecutive year, the airline was voted Britain’s only Five Star Airline by APEX, as well as being recognised as Best Overall airline in Europe in the Official Airline Ratings.

2023 represents a year of delivery, the second year of the airline’s four-year plan. In 2023, underlying EBITDA is expected to increase to a record level for Virgin Atlantic. Despite this, the combined effects of a weak pound, persistent high inflation, fuel prices and rising interest rates mean a return to profitability is now expected in 2024.