Latest / The Front / Virgin’s smart fuel hedge leads to bumper profit

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Virgin’s smart fuel hedge leads to bumper profit · The Front

• 0:01
  Speaker 1: Today's biggest news from The Australian. I'm Claire Harvey with
• 0:04
  Speaker 1: The Front's afternoon headlines. Virgin Australia has announced a bumper profit,
• 0:10
  Speaker 1: with shareholders set to receive their first dividends in almost
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  Speaker 1: two decades. While most of the world's airlines were clobbered
• 0:18
  Speaker 1: with enormous fuel bills, thanks to Iran and the Strait
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  Speaker 1: of Hormuz, Virgin had fuel hedging contracts in place, locking
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  Speaker 1: in the price of Brent crude oil. Qantas did that too,
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  Speaker 1: but Virgin took it one step further. also locking in
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  Speaker 1: prices for the jet fuel refining margin. That's how much
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  Speaker 1: it costs to turn oil into jet fuel, and that
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  Speaker 1: cost has increased by as much as 1,000% in the
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  Speaker 1: past financial year. That's meant Virgin's overall bill for fuel
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  Speaker 1: in the past year was about $ 1 billion, the same
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  Speaker 1: as the year before, and something analysts are applauding as
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  Speaker 1: very rare in the global aviation industry. Virgin also took
• 0:57
  Speaker 1: delivery of new aircraft during the year, 17 Boeing 737-8s.
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  Speaker 1: They burned significantly less fuel than the planes they replaced. Plus,
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  Speaker 1: Virgin pocketed $ 75 million in COVID-era flight credits that finally expired.
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  Speaker 1: Underlying profit before tax grew 17.5% to $ 578. 9 million in
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  Speaker 1: the 2026 financial year, and net profit after tax was
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  Speaker 1: $ 501 million. That's up $ 20 million in a year.
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  Speaker 2: Our strategy is working. We delivered strong earnings growth and
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  Speaker 2: further margin expansion in a year characterised by above inflation
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  Speaker 2: cost and pressures and a challenging geopolitical environment.
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  Speaker 1: It can't last though, Virgins hinting at fair increases in
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  Speaker 1: the coming year and CEO Dave Emerson says its fuel
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  Speaker 1: bill will be significantly up too. Australia will provide $ 5
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  Speaker 1: million in aid to Nepal to be used for food,
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  Speaker 1: emergency shelter and medical support. as the country grapples with
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  Speaker 1: the aftermath of catastrophic flash floods. More Australian consular staff
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  Speaker 1: will also arrive in Nepal in the coming hours. Twenty
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  Speaker 1: officers are already on the ground. Friends and family members
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  Speaker 1: of Australian Michael Keats are praying for his safe return
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  Speaker 1: home after the outdoor education leader was caught up in
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  Speaker 1: the disaster. Keats was trekking near the Himalayan border when
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  Speaker 1: a wall of water believed to be caused by a
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  Speaker 1: glacial collapse swept through the region on Wednesday. Friends told
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  Speaker 1: The Australian they haven't heard from Michael or any other
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  Speaker 1: members of his group in several days. They held a
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  Speaker 1: prayer circle in his hometown of Mollymook on the New
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  Speaker 1: South Wales south coast on Friday. Keats and his companions
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  Speaker 1: from the Trekkers Society group are some of the 39
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  Speaker 1: Australians missing in Nepal. Foreign Minister Penny Wong said that
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  Speaker 1: number could rise.
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  Speaker 3: This is a very distressing time for the families and
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  Speaker 3: friends of those who are missing. We are still working
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  Speaker 3: to gain the specific information on each of the 39
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  Speaker 3: Australians who are missing and we will communicate that to families,
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  Speaker 3: to the next of kin as soon as we are able.
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  Speaker 1: Experts have warned a second flood is imminent as monsoon
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  Speaker 1: rains lash the region and hamper rescue and recovery efforts.
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  Speaker 1: More than 900 people are believed to be missing in
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  Speaker 1: Nepal and Tibet, and almost 400 are confirmed to have died.
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  Speaker 1: Check out those stories live right now at theaustralian.com.au. And
• 3:27
  Speaker 1: come back to the front first thing in the morning
• 3:28
  Speaker 1: for our look at the phenomenon that is Spider-Man Brand
• 3:32
  Speaker 1: New Day. Tom Holland plays a lonely hero fit for
• 3:36
  Speaker 1: Gen Z audiences, and it might just save cinema. That's
• 3:40
  Speaker 1: right here, Saturday morning.