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Joined: Thu Feb 05, 2004 8:41 pm

Virgin Revenue Up 49% To $1,362 Million

Mon May 17, 2004 3:55 pm

Virgin Blue continues to demonstrate strong growth and profitability despite increasing domestic competition.

Virgin Blue’s EBITDAR (earnings before interest, tax, depreciation, amortisation and aircraft rentals) and PBT margins at 30.1% and 16.6% respectively are among the highest of airlines in the world. Virgin Blue’s cost per Available Seat Kilometre (ASK) for the full year to March 2004 was 8.16 cents, with a cost per ASK for the 6 months to March 2004 of 7.73 cents.

“Our cost base is the lowest in the country and declining,” said Virgin Blue CEO Brett Godfrey. “We are committed to keeping our cost base low and are continually working on ways to reduce costs further. Low costs mean we can continue to offer not just the lowest fares but many more of them across the network.”

Capacity (as measured by ASKs) increased by 55% during the year, as 15 new aircraft were added to the fleet. Frequencies were increased on existing routes and new business and leisure services were introduced both in Australia and internationally. Virgin Blue’s 44 aircraft now fly 43 routes to 21 destinations around the country and we are the only low cost carrier in the world with national coverage. As at March 2004, Virgin Blue had over 33% of the Australian domestic market and its market share continues to exceed capacity share.

These increased frequencies have allowed Virgin Blue to continue to make inroads into the business market. The company now has more than 1,000 corporate accounts, including an increasing share of ASX Top 50 companies. In support, Virgin Blue has introduced a whole range of value-added user pays services including Blue Room lounges, Blue Zone seating, inflight catering and valet parking.

Virgin Blue has stepped up to provide additional services to those cities which have been downgraded by Qantas’ decision to replace the full-service Qantas product with the no-frills Jetstar product. In particular, services to Rockhampton, Hobart, Townsville and the Gold Coast have all been increased to better service the local business communities. Virgin Blue believes significant opportunities exist to increase market share in these important regional markets.

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Do you think this will change when Jetstar is introduced later this month or will Virgin Blue continue to spread it's domination on the Australian domestic market?

[Edited 2004-05-17 08:57:53]