Virgin Australia has delivered a strong first half for FY26, with underlying net profit after tax rising 20.7 per cent to $279 million. Underlying earnings before interest and tax (EBIT) increased 11.7 per cent to $490 million, while revenue also climbed nearly 10 per cent (9.3%) compared to the first half of FY25.
Virgin Australia says the result reflects steady leisure demand, higher yields, solid pricing across the network and continued gains from its ongoing transformation program.
According to the company, returns improved despite inflationary pressures, including higher airport charges and maintenance costs.
Specifically, the airlines segment did the heavy lifting, posting underlying EBIT of $419 million, up 13.5 per cent year-on-year.
In total, Virgin Australia carried 11.1 million passengers, a 3.4 per cent increase on the prior period.
Revenue per available seat kilometre (RASK) also grew 6.4 per cent, boosted by strong December trading and event-driven leisure travel. Meanwhile, cost per available seat kilometre (CASK) rose 5.7 per cent, but lower fuel and transformation savings helped offset some of the increase, the group stated in its half-yearly report.
Operationally, performance edged higher. On-time departures reached 72.6 per cent, while the completion rate of 98.5 per cent remained the highest among Australia’s mainline domestic carriers.
Customer satisfaction also improved, with Net Promoter Score rising three points to 28.
Over the six months, Virgin Australia expanded its fleet to 107 aircraft, added six Boeing 737-8 aircraft. Additionally, it’s expecting 12 more deliveries by FY27, supporting steady capacity growth and ongoing investment in newer, more efficient planes.
Loyalty lift
Velocity Frequent Flyer also delivered a robust result for the company, with underlying EBIT rising 14.8 per cent to $74 million, supported by record external billings growth of 18.8 per cent.
In addition, active membership grew 11 per cent – with more than 700,000 new members added – while earnings growth outpaced redemptions, strengthening overall program performance.
Earlier this month, Virgin announced the appointment of Andrew Cleary as CEO of Velocity Frequent Flyer and Chief Customer Officer, bringing Virgin Australia and Velocity under one customer umbrella for the first time.
Optimistic outlook
Looking forward, Virgin Australia expects demand to remain strong and plans disciplined capacity growth of two to three per cent in the second half.
“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,” Virgin Australia CEO and MD 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.”
What’s the challenge?
Despite the positive results, Emerson said cost headwinds remain.
“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,” he explained.
“The broader aviation industry must remain vigilant on costs so aviation doesn’t become unaffordable for Australians.”
Virgin Australia Chief Financial Officer Race Strauss said the company’s approach remains “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,” he added.
“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.
KARRYON UNPACKS: Virgin Australia’s numbers point to stability and momentum. Profit, revenue and margins are moving in the right direction, the core airline is performing, and Velocity continues to grow. For the trade, steady demand and controlled capacity should support confidence in domestic sales and loyalty-driven repeat business.
