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.
