While Virgin Atlantic has posted profit for the first time since 2016, there are early signs of a slowdown in demand for transatlantic flying from United States consumers.
The airline, which is mostly owned by Sir Richard Branson’s Virgin Group, reported an annual pre-tax profit of £20 million, up from a pre-tax loss of £139 million last year.
The company also hit record revenues of £3.3 billion, an increase of £183 million in 2023, thanks to passenger capacity growth of 7.5% and continued demand for business and premium leisure travel.
However, demand could begin to dwindle due to rising tensions between the U.S. and Europe.
"I think we've seen very strong trading for the first quarter," Chief Financial Officer Oli Byers said after the airline reported full-year results on Monday.
"In the last few weeks, we have started to see some signals that U.S. demand has been slowing."
The slowdown of transatlantic travel demand has prompted a drop in shares for rival British Airways owner, IAG hours after Byers comments, becoming the top FTSE faller on Monday.
Economic troubles in the U.S. have also caused a slowdown in domestic travel in the country, which could trickle down to international travel demand. British Airway’s U.S. partner, American Airlines, has seen its share price tumble 40% in two months.
OAG research has shown that passenger bookings between the U.S. and Canada are also down 70% compared to the same time last year.
This also comes as Canada and countries across Europe add new travel advisories for the U.S. after a crackdown on immigration that has detained at least one Canadian.
