Virgin’s smart fuel hedge leads to bumper profit
Virgin Australia announced a bumper profit on Friday, with shareholders set to receive their first dividends in almost two decades. Plus, Australia will provide $5 million in aid to Nepal.
Read more:
Fresh flood warning for Himalayas as search continues for 39 missing Australians
Outdoor education leader Michael Keats named among 39 Australians missing in Nepal floods
Albanese details aid package for Nepal
Virgin Australia posts strong profit and dividend after dodging fuel price crisis
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Speaker 1: Today's biggest news from The Australian. I'm Claire Harvey with
Speaker 1: The Front's afternoon headlines. Virgin Australia has announced a bumper profit,
Speaker 1: with shareholders set to receive their first dividends in almost
Speaker 1: two decades. While most of the world's airlines were clobbered
Speaker 1: with enormous fuel bills, thanks to Iran and the Strait
Speaker 1: of Hormuz, Virgin had fuel hedging contracts in place, locking
Speaker 1: in the price of Brent crude oil. Qantas did that too,
Speaker 1: but Virgin took it one step further. also locking in
Speaker 1: prices for the jet fuel refining margin. That's how much
Speaker 1: it costs to turn oil into jet fuel, and that
Speaker 1: cost has increased by as much as 1,000% in the
Speaker 1: past financial year. That's meant Virgin's overall bill for fuel
Speaker 1: in the past year was about $ 1 billion, the same
Speaker 1: as the year before, and something analysts are applauding as
Speaker 1: very rare in the global aviation industry. Virgin also took
Speaker 1: delivery of new aircraft during the year, 17 Boeing 737-8s.
Speaker 1: They burned significantly less fuel than the planes they replaced. Plus,
Speaker 1: Virgin pocketed $ 75 million in COVID-era flight credits that finally expired.
Speaker 1: Underlying profit before tax grew 17.5% to $ 578. 9 million in
Speaker 1: the 2026 financial year, and net profit after tax was
Speaker 1: $ 501 million. That's up $ 20 million in a year.
Speaker 2: Our strategy is working. We delivered strong earnings growth and
Speaker 2: further margin expansion in a year characterised by above inflation
Speaker 2: cost and pressures and a challenging geopolitical environment.
Speaker 1: It can't last though, Virgins hinting at fair increases in
Speaker 1: the coming year and CEO Dave Emerson says its fuel
Speaker 1: bill will be significantly up too. Australia will provide $ 5
Speaker 1: million in aid to Nepal to be used for food,
Speaker 1: emergency shelter and medical support. as the country grapples with
Speaker 1: the aftermath of catastrophic flash floods. More Australian consular staff
Speaker 1: will also arrive in Nepal in the coming hours. Twenty
Speaker 1: officers are already on the ground. Friends and family members
Speaker 1: of Australian Michael Keats are praying for his safe return
Speaker 1: home after the outdoor education leader was caught up in
Speaker 1: the disaster. Keats was trekking near the Himalayan border when
Speaker 1: a wall of water believed to be caused by a
Speaker 1: glacial collapse swept through the region on Wednesday. Friends told
Speaker 1: The Australian they haven't heard from Michael or any other
Speaker 1: members of his group in several days. They held a
Speaker 1: prayer circle in his hometown of Mollymook on the New
Speaker 1: South Wales south coast on Friday. Keats and his companions
Speaker 1: from the Trekkers Society group are some of the 39
Speaker 1: Australians missing in Nepal. Foreign Minister Penny Wong said that
Speaker 1: number could rise.
Speaker 3: This is a very distressing time for the families and
Speaker 3: friends of those who are missing. We are still working
Speaker 3: to gain the specific information on each of the 39
Speaker 3: Australians who are missing and we will communicate that to families,
Speaker 3: to the next of kin as soon as we are able.
Speaker 1: Experts have warned a second flood is imminent as monsoon
Speaker 1: rains lash the region and hamper rescue and recovery efforts.
Speaker 1: More than 900 people are believed to be missing in
Speaker 1: Nepal and Tibet, and almost 400 are confirmed to have died.
Speaker 1: Check out those stories live right now at theaustralian.com.au. And
Speaker 1: come back to the front first thing in the morning
Speaker 1: for our look at the phenomenon that is Spider-Man Brand
Speaker 1: New Day. Tom Holland plays a lonely hero fit for
Speaker 1: Gen Z audiences, and it might just save cinema. That's
Speaker 1: right here, Saturday morning.