Virgin Express cut its operating loss by 75 per cent to €3.9 million last year, despite lower revenues, as it kept costs under control, partly by reducing its fleet.
The discount airline, controlled by British business leader Richard Branson's Virgin empire, said it planned to further reduce its fleet this year.
Virgin Express is in talks with full-fare peer SN Brussels Airlines to join forces to cut costs and strengthen their position in the face of fierce competition. The airlines, both based in Brussels, are to announce a final agreement on April 12th.
Virgin Express said its operating loss narrowed to €3.9 million last year from €16 million in 2003. Revenues fell 13 per cent to €180 million due to the lower number of aircraft in its fleet.
The passenger load factor was 76 per cent, in line with other discount airlines in Europe, it said. The net loss narrowed by 63 per cent to €7.3 million.
Virgin Express said it had reduced the number of rotations on loss-making routes, closed its Bordeaux route and cut its fleet to 11 from 13 planes.
Earlier this month, SN Brussels, successor to Belgium's bankrupt flag carrier Sabena, posted a small net profit of €600,000.
The April date for an agreement comes ahead of a June deadline the airlines had given themselves after signing a preliminary agreement in October.
The airlines account for nearly half the passenger traffic at the Brussels international airport. They have been feeling the heat, especially from Ryanair, which has a hub in Charleroi, south of Brussels.
Under the terms of the preliminary agreement, the airlines would combine their operations in a joint holding company but still operate as separate businesses. Virgin Express Holdings, 88.6 per cent owned by Virgin Sky Investments, would own 29.9 per cent in the holding, while private investors in SN Brussels would hold the rest.
Virgin Express would delist its stock from Euronext Brussels and the Nasdaq in the US. Its stock ended at €0.95 in Brussels and $1.25 (€0.96) in New York on Thursday. The deal has been seen as a way for Branson to eventually pull out of Virgin Express. - (Reuters)
