Mixed week for Virgin Blue
Virgin Blue has had an eventful week with its share price racing to a high of $1.75 on Tuesday, causing the Australian Stock Exchange to ask “why?”
Responding to the ASX query, Virgin Blue chief financial officer Keith Neate said: “The company is not aware of any information … that has not previously been announced which, if known, could be an explanation for recent trading in the securities of the company.”
However, the company offered a major clue that it had overcome the disastrous slump in profits it encountered in the second half of last year. It said pre-tax and pre-abnormal operating profit for the six months to March 31 “would not vary from the previous corresponding period by more than 15 per cent”.
“The company notes, however, that it operates in an environment that is subject to a number of variable factors which can have a material impact on its financial performance, such as fuel and the market yield,” Mr Neate said.
Goldman Sachs JBWere, CommSec and Macquarie Equities were all quoted as talking up the airline’s prospects in media reports during the week.
However, a dark cloud has appeared on the horizon with news that the airline could be forced to pay millions of dollars in back pay to ground staff who failed to receive shift allowances.
The carrier apparently accidentally left a shift allowance out of the pay packets of its ground handlers and guest services staff from August 2000 until October 2004.
It is understood that while ground staff worked an average of eight hours a day, Virgin’s pay office miscalculated that staff had worked 7.5 hours, and paid shift allowances accordingly.
The Australian Services Union has lodged a claim to have the matter heard in the Australian Industrial Relations Commission in Melbourne on Tuesday.
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