Virgin Australia has beaten its revenue guidance but fuel costs are starting to bite

  • Virigin Australia says its revenue is tracking higher than forecast.
  • The September quarter was up 9.7%, ahead of guidance of 7%.
  • First half underlying profit before tax is now forecast to rise 22% to at least $100 million.

Virgin Australia says first quarter revenue was ahead of forecast.

The airline says revenue for the three months to September was up 9.7%, ahead of guidance of 7%.

And Virgin says revenue will accelerate in the second quarter to 10% growth.

The company now expects underlying profit before tax for the second half to be up by 22% compared top the same six months last year to at least $100 million.

The first half results includes a fuel price increase of about $88 million.

In August, Virgin estimated the total fuel cost for the 2019 financial year to be $1.2 billion, up $213 million on 2018, partly driven by an increase in consumption of 5% to 6%, largely attributable to increased international flying.

Qantas also faces higher fuel prices. The fuel bill was up by almost $200 million in 2018 and it is expecting it to be $3.92 billion, up another $690 million, in 2019.

Virgin in August posted a full year statutory loss after tax of $653.3 million but underlying profit before tax was $109.6 million, an increase of $113.3 million and the highest in ten years. Revenue was up 7.4% to $5.42 billion.