Business Description:
Virgin Australia Holdings Limited (VAH, formerly Virgin Blue Holdings Limited) established itself as a low-cost carrier under the new brand 'Virgin Australia' for both domestic and international operations.

Strategy Analysis:
VBA launched its business in Australia as a full service operator looking to provide travelers an alternative to QAN which has been such a dominant carrier in the country. However the company has found going tough in the leisure segment with the introduction of QAN´s low cost carrier Jetstar. The focus is now on moving up the yield curve by targeting the business end of the market. Certain sectors like the Sydney-Perth sector will see a rise in capacity as the company looks to deploy wide body aircraft to mainly cater to business customers. The company says that every percentage point improvement in yields will have a dramatic effect on the bottom line. VBA has also created a virtual international network by forging alliances with international carriers like Air , Etihad, Delta and Singapore Airlines. These alliances will feed traffic into and out of Australia enabling both leisure and business passengers a viable option to QAN. In addition VBA will not need to invest in expensive aircraft resulting in lower capital expenditure and hopefully better returns. Perhaps the most important and significant tie-up is with Singapore Airlines given its brand image amongst business travelers and its footprint in Asia. Virgin Blue Holdings reported a net loss of $67.8m for the year ended 30 June 2011. The result includes $36m in unrealised foreign exchange loss due to the rising Australian Dollar. Revenues from ordinary activities were $3.27bn, up 9.8% from last year. Diluted EPS was (3.1) cents compared to 1.0 cents last year. Net operating cash flow was $213.5m compared to $369.2m last year. No dividend was declared. The Company expects an improvement in underlying financial performance in Financial Year 2012, despite the uncertain economic environment.