logo - virgin_australiaVirgin Australia may have been winning the aviation PR war but the carrier itself has problems, which yesterday led to a profit downgrade. The big one is that it’s carrying less passengers than it used to. Most of the damage is happening on its crucial domestic network.

In April it flew 5% less pax than the previous year while overall numbers are down 0.8% for the 10 months to April 31. Yet it has more seats to fill with extra aircraft and flights, so domestic loads for the financial year have fallen 4.6% to 75.7%.

The only good news is that the yield per passenger has increased. “This improvement was driven by the benefits of the new Sabre system starting to flow through and a continued increase in penetration of the higher yielding corporate and government markets.”

However, increasing capacity (and with it operating costs) remain a long term issue for the carrier, although not as bad as first thought.

It’s forecasting capacity growth of 4-5% over the next 12 month, down on previous guidance.

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