The Virgin Australia Holdings Limited (ASX: VAH) share price dropped over 5% today after it announced a drop in expected underlying earnings when compared to FY18.

As is suggested in the name, Virgin Australia Holdings is a holding company for Virgin Australia International AirlinesVirgin Australia Domestic Airlines and also Tigerair Australia. Tigerair was acquired by Virgin in 2015.

FY19 Earnings Guidance Announcement

Virgin released earnings guidance for the 2019 financial year. It expects FY19 underlying earnings to be at least $100 million down on the comparative FY18 result of $64.4 million.

This means Virgin is expecting a loss of $35.6 million in underlying earnings.

The company said that the drop takes into account a lower number of domestic passengers and includes annual fuel and foreign exchange headwinds in excess of $160 million.

Travel demand has weakened in both corporate and leisure, as a result of lower consumer confidence and the impact of the Federal Election.

Virgin does expect revenue growth of 6% for the full year, however growth has slowed through the second half and less than 2% is expected for the remaining two months of FY19.

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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).

At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.