Virgin Aust expects minimum $35.6m FY loss
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Virgin Australia expects to report a full-year underlying earnings loss of at least $35.6 million and has warned that weaker domestic demand could push that out further.
Yesterday, Virgin announced flights between Perth and Geraldton would end on July 21 due to low customer demand.
The airline said today underlying earnings for the 12 months to June 30 will be at least $100 million down on FY18's restated $64.4 million due to uncertain domestic market and fuel and foreign exchange headwinds of at least $160 million.
Virgin Australia expects revenue to grow by less than two per cent over the remaining two months of the financial year, leaving full-year revenue growth at about six per cent.
"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 federal election," Virgin Australia said in a statement.
"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."
Chief executive Paul Scurrah, who took charge this year, said the airline had initiated a network review and had already made some capacity and frequency adjustments in line with demand.
“While we have continued to grow revenue, this announcement shows that our business needs to become more resilient to challenges such as weaker demand, high fuel prices and the foreign exchange environment," Mr Scurrah said.
“There is a lot of work being done to develop our new strategy that will help position the group for long-term success."
Virgin Australia shares were valued at 18.5 cents before the start of trade, flat for the calendar year.