Virgin Blue has issued an update to its outlook for the 2009/10 financial year, showing that it is expecting to report a net profit before tax and exceptional items of between $80-$110 million, compared to its loss of $93 million last financial year.
The company said that the increase in expected profit is due to a decrease in the average price of jet fuel, as well as some recovery in domestic yields, which are now expected to be broadly in line with the same period during 2008. However, the company noted that “concerns remain around the pace of the global economic recovery and the continuing volatility in domestic and international markets. In particular, seasonality and competitive activity in the domestic market will see pressure on yields for the remainder of this year.”
Also aiding Virgin Blue could be its proposed joint venture with Delta Air Lines, which has received approval from the Australian Competition and Consumer Commission, but is awaiting approval from the US Department of Transportation. Under the arrangement, the two airlines will operate their South Pacific services as a joint venture, with greater coordination between the two carriers, which is expected to help recover yields on the key US market.