Virgin Express Holdings Plc: 3rd Quarter Profits up 50%


LONDON, Nov. 22, 2002 (PRIMEZONE) -- Virgin Express Holdings Plc (Euronext Brussels:VIRE) (OTCBB:VIRGY):

Highlights


 -- Profit after tax 50% ahead of last year.

 -- Own sales doubled versus last year.

 -- Operating costs below 6 Euro cents/ASK and in line with easyJet.

 -- Voted 'Best Short Haul Airline -- 2002' by Belgian travel trade.

 -- Punctuality remains over 90% throughout year to date.

 -- On track to deliver full year profit.

Chairman's Statement

We are pleased to announce profits of EUR 4.5 million for the 3rd Quarter of 2002, 50% ahead of the EUR 3.0 million shown for the 3rd Quarter last year. This improvement means that in what has been a difficult trading year, Virgin Express is now profitable year to date and we remain on track to meet our forecast made at the beginning of the year for profit for the full year 2002.

Overall sales within the company grew by more than14%, with own sales more than doubling to replace the guaranteed Sabena revenue that existed a year ago.

Operating costs remained well controlled and for the quarter came in below 6 Euro cents/ASK. This figure is in line with easyJet's performance.

Since revealing our plans in July 2002 to enter the German market, both Lufthansa and TUI announced the start up of their own low cost carriers from Koln/Bonn Airport. Predicting a major price war, we in turn announced on September 19 that we were making the sensible decision to step back from our plans to start operations from Koln/Bonn. We will continue to evaluate other opportunities in Europe.

By mutual consent our current commercial agreement with SN Brussels Airlines will end at the end of March 2003. After the sale of the SN Brussels Airlines slots at London Heathrow (the legal possession of which is now under investigation by the Commercial Court of Brussels), we successfully withdrew our remaining services from London to Brussels at the end of October 2002. Aircraft capacity freed up as a result has been has been transferred to our other European destinations from Brussels.

Despite a seasonal trading reduction in the 4th Quarter, we expect continued progress during the remainder of 2002 to deliver full year profits. This position has been achieved in spite of yields being under significant pressure from traditional carriers heavily discounting prices to generate revenue. Our results have been greatly helped by our outstanding on-time performance throughout the year with more than 9 out of 10 flights departing on-time year to date. The Association of European Airlines published for its members an average figure of 77%.

Over the last six months Virgin Express carried more passengers than any other airline at Brussels Airport, thus making our home base the first main airport in Europe where the market leader is a low fare carrier.

Finally, we are delighted to have been voted 'Best Short Haul Airline -- 2002' by the Belgian travel trade, with Lufthansa coming in second place. We have worked hard over the past two years to deliver a high quality, reliable and value for money product for the European travelling public. This award is recognition of the great improvements that have taken place in our airline but we are not complacent. We remain determined to continue the improvement and offer even better value to our customers.

David Hoare

Executive Chairman

Results for 3rd Quarter

In the 3rd quarter of 2002, Virgin Express Holdings PLC reported net profit of EUR 4.5 million versus last year's net profit of EUR 3.0 million.

Net income per IDS and ADS for the quarter and nine months are shown in the table below.


 Earnings per IDS and ADS
 Basic                3Q 2001      3Q 2002      Nine       Nine
                                                Months     Months
                                                2001       2002
 EUR per IDS         EUR 0.61     EUR 0.92     EUR 0.27   EUR 0.13
 USD per ADS(1)      USD 0.18     USD 0.91     USD 0.08   USD 0.12
 Average Shares     4,907,500    4,907,500    4,907,500  4,907,500
 USD/EUR (Average) 
 Exchange Rate          0.890        0.984        0.896      0.926
 USD/EUR (Ending) 
 Exchange Rate          0.913        0.986        0.913      0.986

 (1) On May 28, 2002, Post-Effective Amendment No. 1 to Registration
     Statement Form F-6 became effective, changing the American
     Depository Receipt to Ordinary Share exchange ratio from
     1 ADR = 1/3 Ordinary Share to 1 ADR = 1 Ordinary Share.
     The above-represented figures for 2002 reflect this adjusted
     ratio change.

Revenues

During the year 2002, the company has continuously demonstrated stable revenue growth and has more than replaced previous years' guaranteed Sabena revenue, which accounted for around 40% of the total turnover. In the 3rd quarter of 2002, the scheduled and ad hoc charter revenues grew by more than 22% and 39% respectively.

Virgin Express' unmatched annual punctuality record of over 90%, which in July reached an all- time high of 92.7%, keeps and attracts passengers. In addition, the company has simplified its fare structure. As of September 2002, passengers have been able to change any tickets they purchase. This increased flexibility takes the already transparent fare structure a step further, and Virgin Express now offers only two types of fares: "Virgin Value" and "Virgin Corporate."

Expenses

Despite the stagnant world economy, Virgin Express was able to deliver a third quarter profit up 50% on last year's quarterly result. This improvement was made by a combination of increased cost vigilance and strict cost control discipline. The system unit costs (cost per ASK) have been decreased by 25% versus last year from 7.90 to 5.94 Euro cents per ASK for the third quarter. For the nine-month period year to date, the system unit costs were 6.30 Euro cents per ASK (2001: 8.06 Euro cents per ASK).

Besides the items under direct control of the company such as the corporate hedging policy, the downward trend in operating cost has also been aided by the lower average fuel price and the strengthening of the Euro against the U.S. dollar.

Operating expenses were EUR 63.0 million, representing a 14% increase versus last year, mainly due to an increased number of flights (7%), with an average sector length longer by 36%.

Other costs beyond the company's control have been significantly increased by the respective suppliers in response to last year's 11th September dramatic events: en-route navigation charges, security charges, airport fees and passenger liability insurance costs.

With the exception of the historical factual information, the statements made in this press release constitute forward-looking statements under the safe harbour provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on current expectations and involve certain assumptions, risks and uncertainties that could cause actual results to differ materially from those included or contemplated by the statements. The company disclaims any obligation to update any forward-looking statements as a result of developments occurring after the issuance of the press release.


 Virgin Express Holdings PLC
 Unaudited Results for the Three Months Ended
 September 30, 2001 and 2002

                         Three Months Ended         Six Months Ended
                            30 September              30 September
 (EUR Thousands)         2001          2002         2001        2002
 Revenue
   Scheduled           50,233        61,778      143,154     157,720
   Charter              3,121         4,362        7,241      10,285
   Other                5,585         1,359       18,392       6,428
 Total Revenue         58,939        67,500      168,787     174,432

 Operating Expenses
   Flight Operations    3,654         4,681       12,557      13,706
   Aircraft Fuel        6,972         7,392       20,202      18,774
   Navigation Fees      3,289         5,284        9,597      13,303
   Maintenance          5,714         8,478       17,635      21,116
   Aircraft Ownership  15,115        11,403       45,414      35,834
   Station Operations  10,147        10,114       29,515      28,660
   Passenger Services   2,678         5,573        8,032      13,451
   Sales & Marketing    3,886         5,538       10,816      15,300
   Depreciation & Amort.  315           383          980       1,123
   General &
    Administrative      3,324         4,201       11,037      12,566
 Total Operating
  Expenses             55,094        63,047      165,785     173,832

 Operating Profit       3,845         4,452        3,002         600

 Non Operating
  Income/(Loss)          (882)          157       (1,797)        181

 Profit before taxation
  and minority
   interests            2,963         4,609        1,205         781

 Tax and minority
  interests                44           (71)         120        (124)

 Profit after taxation
  and minority
   interests            3,007         4,538        1,325         657


 Operating Data
 Scheduled Services
  (Euro cents/km)
   RPKs (000)         582,316       825,910     1,619,447   1,992,018
   ASKs (000)         634,159       961,059     1,904,008   2,460,405
   Load Factor           91.8%         85.9%         85.1%       81.0%
   Revenue per RPK       8.63          7.48          8.84        7.92
   Revenue per ASK       7.92          6.43          7.52        6.41
   Flights Flown        5,077         5,469        15,476      15,385
   Passengers Flown   674,795       694,265     1,915,011   1,798,139

 Charter Services
  (Euro cents/km)
   RPKs (000)          44,506        72,061       100,047     151,723
   ASKs (000)          62,875        89,718       151,985     206,061
   Flights Flown          350           363           790         865
   Passengers Flown    32,948        39,699        70,462      86,829
   Block Hours Flown      747           939         1,746       2,157

 Total
  (Euro cents/km)
   RPKs (000)         626,822       897,971     1,719,494   2,143,741
   ASKs (000)         697,034     1,050,777     2,055,993   2,666,466
   Revenue per RPK       9.40          7.52          9.82        8.14
   Revenue per ASK       8.46          6.42          8.21        6.54
   Flights Flown        5,427         5,832        16,266      16,250
   Average Flight
    Length                875         1,186           856       1,092
   Passengers Flown   707,743       733,639     1,985,473   1,884,968
   Block Hours Flown    9,813        12,312        29,133      32,321
   Fuel Gallons (000)   6,761         9,365        19,858      24,013
   Operating
    Cost/ASK (1)         7.90          5.94          8.06        6.30
   Average Fuel Price
    (U.S. cents
     per gallon)        87.75         78.06         88.75       73.58

 (1) Excludes cost associated with Virgin Express Catering Services


            

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