• Strong customer demand with higher fuel costs largely mitigated
• FY26 financial guidance unchanged, 2HFY26 EBIT and EBIT margin expected to be higher
• Balance sheet in strong position with leverage below target range

Virgin Australia Holdings Limited (ASX:VGN) today provided a market update in light of recent significant fuel price volatility caused by events in the Middle East. In FY26, the Group continues to experience strong customer demand with higher fuel costs largely mitigated through effective fuel hedging and recent airfare and capacity adjustments. This has resulted in Virgin Australia's FY26 financial guidance remaining unchanged, with 2HFY26 underlying EBIT and underlying EBIT margin expected to be higher than 2HFY25. The Group's balance sheet remains in a strong position at 31 March 2026 with leverage of 0.8x net debt / underlying EBITDA, which is below the bottom end of the 1-2x target range, and liquidity of $1.5 billion. Fuel costs have more than doubled since the end of February 2026, but Virgin Australia's hedging program has mitigated the impact, with 92% of Brent crude oil and 71% of refining margins hedged for the remainder of 2HFY26. To offset the impact of increased fuel and other operating costs, Virgin Australia has adjusted airfares and capacity in 2HFY26, with RASK growth now expected to be approximately 5% in 2HFY26 and 6% in 4QFY26, compared to previous 2HFY26 guidance of 3-4%. Total domestic capacity is now expected to increase 1% in 2HFY26 and reduce 1% in 4QFY26.

For FY26, Virgin Australia's financial guidance remains unchanged, with 2HFY26 underlying EBIT and underlying EBIT margin expected to be higher than 2HFY25.