Virgin Atlantic profits take a dive

By ROBERT LEA
Updated: 19:00 EDT, 14 March 2001

PROFITS collapsed last year at the cornerstone of Sir Richard Branson's trading empire, Virgin Atlantic - and the airline missed its dividend payments.

In a year of strong competition on transatlantic routes and rising fuel prices, and at a time when British Airways was racking up huge losses, Virgin Atlantic saw pre-tax profits dive to £4.1m in the 12 months to the end of March 2000, against £98.7m the previous year.

At the operating level, profits fell by 60% but the bottom line was further hit by the adviser costs of selling a 49% stake in the business to Singapore Airlines for £600m at the end of 1999 and the distribution of bonuses across the Virgin group as a result of the deal.

Sales during the year rose to £1.27bn from £1.07bn. With capacity on transatlantic routes being freed up, not least by BA's decision to reconfigure its fleet, Virgin directors predict a better performance for Virgin Atlantic in the year to the end of this month, with pre-tax profits of about £65m.