Airline operator Virgin Australia Holdings Ltd (ASX: VAH) has today reported a net loss of $53.1 million for the six-month period ended 31 December 2014.
Virgin described last financial year as, "One of the most difficult operating environments in the history of Australian aviation." Notably, ongoing weak consumer sentiment continued to push down total domestic passengers in the first half of 2015, with Virgin reporting a decline of 0.7%.
With the integration of Tigerair, revenue jumped 6% over the prior period but whilst oil prices plummeted, Virgin's fuel and oil costs actually increased, so too did its aircraft leasing and related charges.
Virgin managed to reduce its loss by $26.5 million, making the result appear to be a solid improvement from a year earlier. However in the second half of 2015, the group says it's expecting an even better result.
Without providing specific details, Virgin told the market to, "Expect an improved performance in the second half of the 2015 financial year compared to the second half of the 2014 financial year."
Should you buy Virgin Australia shares?
Today's results are undoubtedly an improvement on last year. Looking forward, with Tigerair reporting its first underlying profit since 2010, an aggressive $1 billion focus on cost reduction, a growing Velocity member base and falling oil prices, I wouldn't be surprised if Virgin improves significantly on these results in coming reporting periods.
Although, I'd never buy shares in the company. As Richard Branson (who conceived the Virgin Group back in 1970) famously said, "If you want to be a Millionaire, start with a billion dollars and launch a new airline."
