Virgin Australia On Course For H1 Profit Lift

By Glenn Dyer | More Articles by Glenn Dyer

While Flight Centre battles to get its Australian leisure travel business back on track and lift profit, one of its major clients – Virgin Australia is doing well, and now expecting a sharp improvement in earnings.

Virgin Australia told the ASX yesterday that it now expects to lift first-half underlying pre-tax profit at least 22% to about $100 million after a jump in first-quarter revenue.

The airline says revenue for the three months to September 30 rose 9.7% on the prior corresponding quarter, well above its 7.0% guidance.

Virgin said current booking trends and a strong domestic performance suggest second-quarter revenue will rise another 10%.

Virgin Australia reported an underlying profit before tax of $109.6 million in the year to June but reported a sixth consecutive statutory loss of $681 million after impairments and tax adjustments.

Its statutory profit was hit by a $120 million impairment of its international business assets and deferred tax accounting write-offs for $451.9 million.

It said on Monday its first-half guidance was inclusive of an estimated year-on-year fuel price increase of $88 million, compared to the $85 million it flagged in August.

Virgin Australia shares were unchanged at 20.5 cents.

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About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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