Virgin Australia Holdings shares soar

Shares rise 5.4%, despite Virgin’s forecast of $49 million loss for the first half

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Virgin Australia Holdings (ASX: VAH) has seen its shares fly, after the upstart airline told the market it expects its first half results to be in-line with expectations.

Virgin Australia domestic flight

At lunchtime, Virgin shares were up 5.4% to 33.2 cents.

You might be surprised to learn that Virgin isn’t exactly reporting a profit. The company says it expects to report a $49 million loss for the first six months.

I guess investors were expecting much worse.

Ongoing air wars with its larger rival Qantas Airways (ASX: QAN) in the domestic market are hurting both airlines, as Qantas sticks to its ‘line-in-the-sand’ 65% market share at any cost.

Yesterday, Virgin shares fell as much as 16%.

Only 26% of the total shares are available for trading, with Air New Zealand (ASX: AIZ), Singapore Airlines, Etihad and Sir Richard Branson’s Virgin Group holding the remainder.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

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