Market, Debbie a blow to Virgin

VIRGIN Australia is likely to post an annual underlying loss after a subdued domestic travel market and Cyclone Debbie contributed to an increase in its loss for the third quarter of the financial year.

The airline made an underlying pre-tax loss of $62.3 million in the three months to March, much larger than its $18.6 million underlying loss a year earlier. The company said domestic industry trading conditions were subdued in the period.

It added that revenue was also impacted by Cyclone Debbie in March and the decision by its Tigerair business in February to permanently end flights between Australia and Bali contributed.

Virgin Australia was also hit by costs associated with its removal of some aircraft from its fleet.

The airline has made an underlying loss of $20.2 million in the first nine months of the 2016/17 financial year.

It said it expects its underlying performance in the final three months of the year to be stronger than the same period last year, when it made an underlying loss of $21.9 million. Virgin Australia made an underlying pre-tax profit of $41 million in 2015/16, its first since 2011/12. It has made a net loss in the past four financial years and is on track for another in 2016/17, with a loss of $90.6 million in the first nine months of the year.

Virgin Australia shares were down half a cent at 17.5¢.