Virgin Atlantic sees profits take off

The carrier has anounced a doubling of profits, shocking analysts and prompting a scratching of heads at bitter rival British Airways. The UK flag carrier announced its own set of results a few days ago, which saw it report a record loss.

Virgin said its pre-tax profits jumped to £68.4m last year from £34.8m the year before, in the face of a severe global recession and soaring oil prices during the period.

The figures compare very favourably with British Airways, whose chief Willie Walsh, reported an operating loss of £401 for the year, with fuel costs alone reaching £3bn.

Virgin's numbers were helped by a larger amount of premium passengers among the total of 5.8m who flew with the airline in the 12 months. Fuel costs were helped by currency arrangements and its oil price hedging strategy, which meant it spent just £1bn on aviation fuel.

Group sales, which include tour operator Virgin Holidays, were 8.4 per cent higher at £2.6bn, with majority-owner and  President Richard Branson saying: "The last financial year has proven to be the most volatile yet in our 25-year history. To increase profits against a backdrop of such a severe recession is an excellent achievement by all of our staff at Virgin Atlantic."

As a result of the group's performance employees will share a bumper bonus payout - 10 per cent of the group's profits are divided among its staff.

WHAT THEY SAY:Mark Priest, senior trader at ETX Capita, Wall Street Journal: After British Airways PLC's crash landing last week it comes as some surprise that Virgin Atlantic is flying high, as its increase in premium passengers has bucked the trend. However, the markets won't be fooled - the last quarter hasn't been short of turbulence for Virgin Atlantic. Expect a bumpy ride over the summer.

Matthew Gwyther, Management Today: CEO Steve Ridgway isn't getting carried away; he says this next year will be much tougher, and warned that Virgin will need to chop costs and keep a beady eye on its cash position to stay ahead of the game. But we'd certainly rather be in his chair (or should that be his Upper Class flat bed?) than that of BA counterpart Willie Walsh at the moment, judging by today's results. ·