Virgin Australia Holdings has trebled its losses for the full year ending in June.
The carrier announced an after-tax loss of A$355.6 million (£200.5 million) which represented a huge increase on the A$98.1 million posted during the same period 12 months earlier. The company stated that rising carbon tax costs, weak consumer sentiment and overcapacity in the market are some of the key reasons behind its poor performance.
Virgin Australia's result continues a trend among the aviation sector. Fellow Australian carrier Qantas has also been struggling of late with the national flag company reporting a A$2.8 billion net loss for the year to June. It represented the company's biggest ever annual loss and was forced to write off A$2.6 billion from its international fleet.
John Borghetti, Virgin Australia's chief executive officer, said: "The 2014 financial year has seen one of the most difficult operating environments in the history of Australian aviation.
"While the Virgin Australia Group performed well in attracting high yielding passengers and containing cost growth over the full year, underlying revenue performance was impacted by the challenging operating conditions."
The carrier is looking to lower its current debt levels through the sale of its Velocity frequent flyer program. Virgin Australia is still seeking regulatory approval from the nation's foreign investment review board but, if given the go-ahead, will help to improve the firm's cash position allowing it to tackle its debt.
Another airline in turmoil is Malaysia Airlines which is expecting yet more losses in the second half of the year. The company has experienced two major tragedies in the space of a few months and it has severely impacted on its operations. Flight MH370 disappeared in March and is still yet to be found while Flight MH17 crashed in Ukraine in July.
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