Corporate giants Fairfax Media and Virgin Blue have posted huge losses as the economy slams the aviation and media sectors.
Virgin Blue lost $101 million in the six months to 31 December, amidst what chief executive Brett Godfrey has described as the most volatile conditions in commercial aviation history.
The company has announced a raft of cost-cutting measures, including slashing capacity by 8%, cutting around 400 full-time staff, cutting executive pay packets by up to 30% and reducing directors’ fees by 10%. The company is targeting another $40 million in cost cuts in the second half of the 2008-09 financial year.
Meanwhile, Fairfax Media has posted a loss of $365.3 million for the first half and has warned that advertising markets are likely to remain weak until at least the end of this financial year.
Underlying profit fell 23% to $157.6 million, but writedowns and impairments – including a non-cash writedown of the value of mastheads, licenses and goodwill across all publishing and broadcast media properties of $447.5 million – pushed net profit into the red.
The only bright spot for the media giant was its online businesses. The company says its New Zealand site TradeMe and its Fairfax Digital sites are performing well.
“Total traffic across all the Fairfax sites continues to grow strongly and the business maintains its leadership in the important news and information market, and maintains very strong positions in both classifieds and its online transaction businesses,” chief executive Brian McCarthy said this morning.