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Earnings Analysis: 
Virgin Blue Proft Slips, Higher Costs
Author: 123jump.com Staff
123jump.com
Last Update: 3:20 PM EST February 20 2008


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virgin Blue, second largest airline, reported net income for the six months ended in December 2007 of $113.3 million, lower than $124.2 million from a year ago. Higher operating costs on routes to the Western U.S. location in direct competition hurt the profitability. half year results for the period to 31 December 2007. Revenue for the six months increased 8.1% from $1.12 billion to $1.21 billion with revenue per available seat kilometre increased 5.2% to 10.10 cents.

 
Virgin Blue''s share falls as net income declines

Australia''s second-biggest carrier, Virgin Blue, fell 10.5% after the company announced today that its net income declined to $113.3 million in the six months ended December 31, from $124.3 million a year earlier.

Its sales rose 8.1% to $1.21 billion. The company also registered a 5.2% rise in revenue per available seat kilometer to 10.10 cents.

The company sold in January 83.4% of its available seats compared to 83.3% a year earlier. The company hired Goldman Sachs to find ways to realize higher asset valuation from its current market cap of $1.4 billion.

It added that board aims to complete the review within the next few weeks. Virgin Blue posted 8.8% drop in first-half net income on higher costs to challenge Qantas Airways Ltd. routes to the U.S.

The airline also faces increasing competition on domestic routes from Tiger Airways Pte, which entered the market in November.
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