Virgin Australia forecasts FY2019 underlying loss, due to domestic market conditions, fuel and forex

    Virgin Australia Holdings published (17-May-2019) a trading update and  earnings guidance for FY2019 financial year, based on current economic conditions, capacity and forward booking trends. Key highlights include:

    • Underlying earnings to be at least AUD100 million (USD69.0 million) down on the FY2018 comparative result of AUD64.4 million (USD44.4 million), reflecting the uncertainty of revenue trading conditions in the domestic market and inclusive of annual fuel and foreign exchange headwinds in excess of AUD160 million (USD110.3 million);
    • Demand has weakened in both the corporate and leisure sectors, driven by lower levels of consumer and business confidence, consumer spending and the impact of the Australian Federal Election. The corporate sector has been affected by the timing of the Easter holiday period and has been slow to recover due to the impact of the election;
    • Revenue growth of 5% for the full year. Revenue growth has moderated throughout the H2FY2019 and the group expects less than two per cent for the remaining two months of FY2019;
    • Virgin Australia has initiated a network review and has made some immediate adjustments to capacity and the frequency of services to better align with demand conditions.