Regional Round-Up
Virgin’s Velocity deal
September 1st 2014
Virgin Australia CEO, John Borghetti, surprised the market when he revealed at the company’s results announcement that the airline intended to sell 35% of its Velocity frequent flyer program to private equity group, Affinity Equity Partners. Read More » The carrier reported an annual loss of US$332.4 million. Borghetti said the Velocity deal would increase the airline’s cash balance by $306 million. Velocity’s total value based on the partial sale is valued at around $910 million. Virgin increased its yield by 1.2% for the year, a benefit that was cancelled out by a 3.4% increase in cost. Capacity rose by 0.1% and corporate business grew to 25% of domestic revenue. Virgin will introduce business class on all trans-Tasman and Pacific Island routes in 2015. Subsidiary, Tigerair Australia, lost $52 million, in line with the fall off in revenue at rival, Jetstar.
