Virgin Australia Holdings (ASX:VGN) said that its fiscal 2026 financial guidance remains unchanged, with the underlying earnings before interest and taxes (EBIT) and underlying EBIT margin in the second half expected to be higher than the prior-year period, according to a Wednesday Australian bourse filing.
The airline is hedged 92% for Brent crude oil and 71% for refining margins for the remainder of the second half of fiscal 2026, and the exposure to the unhedged portion of both Brent crude oil and refining margins in fiscal 2026 is expected to result in an increase of fuel costs for the half of around AU$30 million to AU$40 million.
It adjusted airfares and capacity in the second half to offset the impact from increased fuel and other operating costs such as airport charges. The airline's fuel suppliers continued to provide assurances regarding the near-term supply of aviation fuel to support its operations well into May.
Revenue-per-available-seat-kilometer growth is now expected to be around 5% in the second half, and 6% in the fourth quarter of fiscal 2026, compared with previous second half guidance of 3% to 4%. Total domestic capacity is now expected to increase 1% in the second half and fall 1% in the fourth quarter.
Virgin's services to Doha in Qatar, operated via the wet lease arrangement with its partner Qatar Airways, are cancelled until mid-June. Its fiscal 2027 settings, including capacity, are under review.