SYDNEY (AP) Major shareholders in Virgin Australia Holdings Ltd., the country's No. 2 airline, have provided it with a line of credit after the carrier Friday reported a 98 million Australian dollar ($88 million) annual loss.
The loss for the year ended June 30 was a reversal from an AU$22.8 million profit the previous year. The result was in line with the company's guidance for a loss between AU$95 million and AU$110 million. The company said a difficult economy, competition with Australian flag carrier Qantas Airways Ltd. and a carbon tax was to blame.
Virgin's major shareholders have provided the airline with an AU$90 million loan facility to ease any concerns it doesn't have enough cash to support its daily operations. Air New Zealand, Etihad Airways and Singapore Airlines are each separately providing funding, with a one year loan term.
Virgin chief executive John Borghetti would not provide profit guidance for the current fiscal year, given the uncertain economic environment. But he said the company had managed to reduce costs by more than AU$60 million and that the latest year was a pivotal one for the airline.
"We completed our major restructuring and transformation program, and reshaped the competitive landscape of the Australian aviation market, despite a very difficult economic environment and intense competition," he said.
