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Audit Clearance Confirms Trading Profit Of $519,000
Virgin Blue confirmed today, following audit clearance of the first period results by KPMG, that the airline recorded an operating profit before abnormal items of $518,962 for the seven-month trading period ended 31 March 2001.
Abnormal items comprise pre-trading start up expenses incurred in establishing the airline prior to commencement of commercial operations on 31 August 2000.
Virgin Blue's Board of Directors has taken the decision to write off these pre-commencement costs of $11.3 million in the airline's first financial period.
The net result after abnormal items for the 16-month reporting period from incorporation to 31 March 2001 was a loss of $10.8 million.
The encouraging trading profit comes ahead of schedule based on the pre-launch business plan and has been earned despite all time lows in the Australian dollar, record high jet fuel prices and unprecedented competitive pressures.
A total of 641,113 passengers were carried up to March 2001 with load factors averaging over 74%.
Virgin Blue Chief Executive, Brett Godfrey said, "The big airlines have been using extraordinary resources to see us off and despite all of their efforts, we have turned an early trading profit. This clearly shows that through a dedicated, professional and customer focused team that is second to none, we are winning".
Before the end of this week, Virgin Blue will carry its millionth passenger after 10 months of flying and the airline is on track for its second million well before the end of this calendar year.
"We have never deviated from our original launch strategy and that is to provide a unique product based around value for money, genuinely friendly staff, on-time performance and brand new, state-of-the-art aircraft. We are confident of our future in this market and are proud to have introduced Australian's to a viable low fare alternative to the traditional duopoly", Brett Godfrey finished.
Virgin Blue has just taken delivery of its third Next Generation Boeing 737-700 from the Boeing factory in Seattle, bringing the total fleet to nine aircraft and is set to launch its most requested route, Sydney-Melbourne next month, along with a daily Brisbane-Canberra service.
Virgin Blue operates the most modern, technologically advanced aircraft in Australia today, with an average age of less than 5 years, compared with Ansett's average fleet age of 11.7 years and Qantas with an average fleet age of 10.8 years. (Salomon Smith Barney 2001 Fleet handbook and amendments)