Virgin Australia Holdings Ltd (ASX: VGN) shares are up 0.8% at the time of writing on Thursday morning to $2.54 a piece. Today's share price uptick follows a 11.5% rally in the airline's share price on Wednesday.
The Australian airline company's share price has struggled recently after news that ongoing conflict in the Middle East will severely tighten jet fuel supply. Reports are that Virgin Australia's partnership with Qatar Airways is also being tested as the conflict in the Middle East continues to affect aviation routes. This also dented investor sentiment earlier this month.
Qatar Airways currently owns 25% of Virgin Australia and provides aircraft and crew for several services under a wet lease arrangement.
For the year to date, the shares are down 27% and they're down 21.4% over the year.
But the latest uptick suggests that Virgin Australia shares could have finally reached the bottom and are beginning to ascend.
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What is pushing Virgin Australia shares higher?
There hasn't been any price-sensitive news out of Virgin Australia this week to explain the sudden share price reversal. This suggests the rebound is driven by broad market sentiment.
Virgin Australia recently raised its domestic airfares in response to rising jet fuel costs, which could help maintain or even boost revenue.
At the same time, the airline's share price has fallen heavily in the past month, by almost 20%, due to concerns about how tightened fuel supply will affect Australia's travel companies. The shares bottomed to an all-time low on the 20th of March, which sparked interest from bargain-hunting investors.
Another positive which has possibly supported the share price increase is a jump in demand for domestic travel. With many international flights postponed or cancelled, many Australians are refocusing their attention to short-haul domestic travel instead.
Will the ASX travel stock's share price keep climbing?
TradingView data shows that seven out of eight analysts have a buy or strong buy rating on Virgin Australia shares. One more has a hold rating.
The average target price is $3.86, which implies a potential 51.5% upside at the time of writing. Although some are even more bullish and expect Virgin Australia shares to soar 66.7% higher to $4.25 over the next 12 months.
