Fund Manager Summary on Virgin Australia Holdings Ltd (ASX:VGN)
In December 2025, Blackwattle Investment Partners commented that Virgin Australia Holdings Ltd (ASX:VGN) rebounded strongly as short-term jet-fuel cost concerns dissipated, reaffirming a long-term thesis that a domestic duopoly, fleet reinvestment and operating-cost restraint underpin profitability and leave the stock trading at around 7x forward P/E. Across fund managers, commentary converges on structural tailwinds for VGN driven by a comfortable domestic duopoly and recovery in air travel, with Tyndall noting attractive valuation and margin of safety at the IPO price ($2.90 implying ~6x P/E and a ~35% discount to Qantas), plus benefits from fuel hedging and a fleet reinvestment strategy; however, managers emphasize material near-term risks including higher-for-longer interest rates weighing on travel demand and episodic refining-margin-driven jet-fuel cost spikes, so actionable considerations are to monitor fuel-hedge coverage and refining margins, execution of fleet and cost-control initiatives, fare and capacity dynamics that affect margin pass-through, and macro sensitivity to interest-rate and inflation moves.
Commentary From The Managers
There are 3 insights from 2 fund managers regarding their investment in Virgin Australia Holdings Ltd (ASX:VGN) available on Thesis Tracker.
Unlock Updates With ThesisTracker Pro
Don’t let information asymmetry undermine your investment returns. Join other engaged investors on ThesisTracker Pro.
Updates are made available to members within 12 hours of being released. The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Blackwattle Investment Partners
31 Dec 2025
$3.50
Summary
- Blackwattle Investment Partners believes Virgin Australia offers attractive long‑term returns and continues to hold because structural industry advantages and cost discipline should drive profit recovery.
- Rebound from short‑term weakness: stock recovered after October–November softness caused by market concerns over widening refining margins and higher jet fuel costs despite weak crude.
- Longer‑term profitability focus: investment thesis emphasises sustainable earnings power rather than transitory cost moves.
- Comfortable duopoly: the Australian domestic airline market structure should allow higher industry‑wide costs to be passed on to passengers, supporting margins.
- Operational self‑help: expect management to implement measures to restrain other operating costs and support profit growth.
- Noise dissipated: as fuel‑cost headlines faded in December, the market re‑recognised the underlying tailwinds for the business.
- Attractive valuation: equity still trades at around 7x forward P/E even after the December rally.
Tyndall Asset Management
30 Nov 2025
$3.00
Summary
- Tyndall Asset Management continues to hold its position in Virgin Australia (VGN) despite recent performance challenges.
- The travel sector has faced pressure due to a shift in interest rate outlook linked to higher-than-expected inflation data.
- Tyndall remains positive on VGN's future, citing benefits from its fleet reinvestment strategy.
- There is a long-term growth dynamic anticipated in the air travel sector.
Tyndall Asset Management
30 June 2025
$3.09
Summary
- Tyndall Asset Management is attracted to the current industry structure of Virgin Australia, characterized by a duopoly in the domestic market.
- The majority of Virgin's earnings are derived from this domestic market.
- The FY26 earnings outlook is strong, supported by hedged fuel costs, which are the largest expense for airlines.
- Ticket fares remain robust, contributing to the positive earnings outlook.
- The IPO price at $2.90/share implies a 6x P/E multiple, representing a 35% discount compared to its peer Qantas.
- There is a considerable margin of safety in participating in the IPO.
The completeness, accuracy or current status of the investments referenced are not guaranteed.
Investment Ideas Scanner
Why fund managers back Insurance Australia Group (ASX:IAG): RACQ deal & reinsurance lift margins
Lowell Resources backs Brazilian Critical Minerals (ASX:BCM) as '10-bagger' rare-earth play
Why fund managers backed xReality (ASX:XRG): 28% QoQ recurring revenue after Texas DPS win
Why fund managers are backing Charter Hall (ASX:CHC): earnings upgrades & surging FUM inflows
ANZ (ASX:ANZ): Why fund managers back the CEO‑led turnaround
Peter Warren Automotive (ASX:PWR): 13x PE, EV expansion & late-cycle demand
Mereweather adds to Ras Technology (ASX:RTH) — ARR > $20m, ~20% growth
DMX May 2024: Michael Hill (ASX:MHJ) priced for disaster — can cost cuts spark recovery?
Why fund managers back Amaero Ltd (ASX:3DA): US spherical powders scaling to 800tpa
Austal (ASX:ASB): $220m raise, Hanwha stake & US shipyard expansion
Frequently Asked Questions
Who is investing in Virgin Australia Holdings Ltd (ASX:VGN)?
Fund managers including Tyndall Asset Management and Blackwattle Investment Partners have invested in Virgin Australia Holdings Ltd (ASX:VGN).
Why do fund managers invest in Virgin Australia Holdings Ltd?
Fund managers invest in Virgin Australia Holdings Ltd due to its favorable positioning in a duopolistic domestic market, which is expected to drive earnings growth. With a strong FY26 earnings outlook and hedged fuel costs, the company maintains robust ticket fares. The IPO price reflects a 6x P/E multiple, offering a significant discount compared to competitors. Despite recent sector pressures, the fleet reinvestment strategy and long-term air travel growth prospects suggest a solid risk/reward profile.
What happened to Virgin Australia Holdings Ltd (ASX:VGN)?
Fund managers believe in the long-term growth potential of Virgin Australia Holdings Ltd (VGN), citing the positive impact of its fleet reinvestment strategy despite recent performance challenges due to sector pressures from rising interest rates and inflation. This indicates a strategic commitment to capitalizing on future growth in the air travel market.
What is the short interest in Virgin Australia Holdings Ltd (ASX:VGN)?
The short interest in Virgin Australia Holdings Ltd (ASX:VGN) is 0.48% which makes it the 280th most shorted stock on the ASX. Of the 782.0M shares that Virgin Australia Holdings Ltd has on issue, 3.8M have been sold short.
What does Virgin Australia Holdings Ltd (ASX:VGN) do?
Virgin Australia Holdings Limited (VGN) provides domestic and international travel services to Australian and international customers. The company also works with international airline partners, including Qatar Airways, United Airlines, Singapore Airlines and Air New Zealand.