Discount flights clip Virgin's profits

Brussels based Virgin Express Holdings PLC has posted a full year net loss of €19.6m compared with last year's profit of €0.4m.

The group attributes the loss to heavy price discounting. Virgin Express Holdings offers low-fare, no-frills service in Europe with a fleet of about 15 Boeing 737s, flying to nearly 20 destinations around western Europe

The airline has recorded an operating loss of €14.8m compared to a year-earlier profit of € 2.6m.

Sales fell to €207.1m from €227.3m and the load factor rose to 81.3% from 80.7%.

Virgin Express said that during 2004 it will make further cost reductions as a result of aircraft lease extensions at lower rates and contract negotiations.

Regarding its merger talks with SN Brussels Airlines, it said: "Following further discussions and the completion of satisfactory due diligence, we would expect to announce the board's decision in the near future. Regulatory approval may be required."