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 Airlines, Virgin 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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