According to an update it released to the market a day after Qantas announced cuts to its domestic routes across the group, the airline said, “In FY26 the group continues to experience strong customer demand with higher fuel costs largely mitigated through effective fuel hedging and recent airfare and capacity adjustments”.
VA said this had resulted in its FY26 financial guidance remaining unchanged with H2 FY26 underlying EBIT and underlying EBIT margin still expected to be higher than the previous corresponding period.
It suggested that there would be an increase in its fuel costs for H2 FY26 of $30-40 million thanks to the group being hedged 92%
for Brent crude oil and 71% for refining margins.
As a result, airfares have been adjusted to compensate for the increased costs, but total domestic capacity was now expected to increase 1% in H2 FY2026 while it would reduce 1% in Q4.
Virgin Australia admitted that given ongoing volatility, FY27 settings including capacity were “under review”, revealing that for H1 FY27, the Group was hedged 93% for Brent crude oil and 15% for refining margins.
Over the past month VA (ASX: VGN) has dropped 10.65% to sit at $2.35 with a market capitalisation of $1.84 billion.
