Virgin Australia posts $279m profit in first half since ASX return

According to the carrier, the results were “underpinned by continued progress in the Group’s Transformation Program, which delivered more than $200 million in gross benefits”.

“The Group’s continued strong performance clearly demonstrates that our constant focus on transformation and innovation is not only delivering strong financial outcomes but strengthens our ability to remain a robust competitor for years to come,” chief executive Dave Emerson said.

“Virgin Australia is proud to play a critical role in delivering choice and value for Australian travellers, and we are laser-focused on serving our core customer groups of premium leisure, small and medium enterprises, and value-conscious corporates.

“Through careful cost management and decision making, we are striking the right balance between value, flexibility and quality, and our customers are responding well.”

Both the Airlines and Velocity Frequent Flyer segments performed strongly during the half, with Airlines recording an underlying EBIT of $419 million due to “stronger than expected leisure demand”, an increase of 13.5 per cent year on year, though costs also increased due to increases in airport and maintenance costs.

Velocity recorded an underlying EBIT of $74 million, an increase of 14.8 per cent on last year, fuelled by “record external billings”, up 18.8 per cent.

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“Passenger demand remains strong, with consumers continuing to prioritise travel and connectivity, supporting the airlines segment. Our loyalty business, Velocity, continues to be a key growth driver for the Group, with growth in external billings driven primarily by financial services products,” Emerson said.

“However, cost pressures persist across the industry, with costs growing above inflation in several areas of the aviation supply chain, including airport charges and aircraft maintenance.

“The broader aviation industry must remain vigilant on costs so aviation doesn’t become unaffordable for Australians.”

Additionally, Virgin says its customer satisfaction and operational performance are improving, with its Strategic Net Promoter Score (NPS) increasing by three points on 1HFY25 to 28.

“Financial metrics only tell part of the story, and we are very pleased with the ongoing improvements in our operational performance – including consistent industry-leading completion rates – and the continued uplift in customer satisfaction,” Emerson said.

“We know that our more than 8,000 employees are the driving force behind our performance, and the choice and competition we bring to the market as a challenger brand. We will continue to focus on delivering strong operational performance, exceptional customer experiences, and the multilayered benefits of our award-winning Velocity Frequent Flyer program.”

Virgin’s fleet now comprises 107 aircraft as at 31 December, with six 737 MAX 8 aircraft delivered over the half and a further 12 expected this year. Nine of these aircraft will be purchased outright instead of leased, and Virgin expects its total fleet to stand at 108 by the end of June.

According to CFO Race Strauss, Virgin’s investment approach is “disciplined and strategic, centred on delivering positive outcomes for our customers, our people, and our shareholders”.

“We make deliberate decisions about where we compete, to stay true to our core customers and maintaining long-term financial resilience so we can continue reinvesting in the business for their benefit. This is supported by our lean cost base and simplified fleet, driving efficiency and high-quality performance,” he said.

“By complementing our domestic footprint with select short haul international destinations and a world class network of long-haul partners – including our strategic partnership with Qatar Airways – we offer customers global connectivity without losing focus on our home market.

“Strong financial performance and cash generation have further strengthened the balance sheet, supporting continued investment in new fleet and value‑accretive growth opportunities.

“We anticipate continued growth in both revenue and underlying EBIT for FY26, driven by strong travel demand, the impact of our Transformation Program, and sustained growth in Velocity.”

In the wake of the results, the TWU has called on Virgin and major investor Bain Capital to further lift standards ahead of bargaining this year, with national secretary Michael Kaine saying they must “invest in the workforce that’s made all of this possible”.

“These results show that a model where workers are directly employed and properly consulted yields strong results. But across the board, pilots, cabin crew and ground crew are still struggling under poor rostering, under-staffing and lack of work-life balance,” he said.

“Workers at Virgin are at the point of pursuing part-time arrangements because it’s so unsustainable to manage the full-time demands of their jobs. Meanwhile we saw Jayne Hrdlicka depart as CEO with an eye-watering $50 million pay-out, which workers are rightly outraged by.

“As ground and cabin crew begin bargaining this year, with pilots shortly to follow, they’ll be making it clear to Virgin and Bain that they deserve better. The time of emergency settings during the airline’s existential crisis is over – it’s time for standards to substantially lift at Virgin.

“Workers have pushed Bain to commitments like further insourcing of jobs, an employee share scheme, and consultation over the Qatar partnership. That model is not just the right thing to do for Virgin’s loyal workforce – it is making huge profits for the airline.”

Virgin Australia returned to the ASX in June last year.