Virgin Australia forecasts $700M fuel bill
Key points
- Virgin Australia reaffirmed its first-half operating earnings outlook while projecting roughly $700 million in fuel costs.
- Virgin Australia shares traded down at $2.81 on the Australian Securities Exchange after the update.
- The carrier is adjusting flight capacity and ticket pricing to manage elevated industry operating expenses.
Virgin Australia (ASX:VGN) reaffirmed its first-half earnings guidance while estimating fuel costs of approximately $700 million.
The carrier projected underlying first-half operating earnings to remain broadly consistent with the prior corresponding period.
The company stated that fuel expenses will rise in the second half despite reduced overall flying capacity.
Virgin Australia said domestic flight capacity will drop 4% in both the second and third quarters.
Following the announcement, the Virgin Australia share price was down at $2.81.
The airline expects its loyalty division, Velocity, to deliver full-year underlying earnings broadly flat against last year.
Management is relying on its internal transformation program and reduced maintenance spending to offset higher airport and labor expenses.
