Virgin Australia to post $225m loss

Virgin Australia will post an annual loss of $224.7 million due to the impairments and charges it expects to record from its plans to position the airline for future profitability.

Australia's second biggest carrier reports its full-year results on August 5, but in a fourth quarter trading update has warned of the impact of the changes the airline says will save up up $300 million per year by the end of 2018-19.

Underlying profit for the 12 months to June 30 will meet guidance at $41 million, an improvement on the previous year's $49 million, but the bottom line will be hit by previously announced impairments - most of which were recorded in the fourth quarter.

Virgin Australia said it will post a net loss of $228 million for the final three months of 2015-16, and a full-year net loss of $224.7 million.

The airline's changes include the streamlining of its fleet of aircraft and efforts to improve the efficiency of its crew and ground operations.

Virgin Australia cut domestic capacity by 2 per cent in the final three months of the 2015-16 year to reflect demand, and said its underlying pre-tax loss for the period narrowed by $15 million to $21.9 million.

"The group improved its underlying performance, passenger numbers and load factors in the fourth quarter in a challenging operating environment," chief executive John Borghetti said.

"During the quarter, the group took action in response to operating conditions through strategic capacity reductions in line with demand."