Virgin Australia (VGN) H1 2026 earnings summary

Executive summary

• Delivered strong first half FY 2026 results with revenue up 9.3% and underlying EBIT up 11.7%, supported by robust demand, transformation benefits, and disciplined capacity management.

• Transformation program delivered over $200m in gross benefits in 1HFY26, on track for over $400m in FY26.

• Velocity loyalty program achieved record external billings, 11% growth in active members, and double-digit EBIT growth.

• Statutory NPAT decreased 27.9% to $341.1m due to prior period deferred tax asset recognition.

• Maintained focus on operational excellence, customer experience, and continued investment in fleet and transformation initiatives.

Financial highlights

• Revenue increased 9.3% year-over-year to $3,323m, driving underlying EBIT up 11.7% to $490m and EBIT margin to 14.8%.

• Underlying NPAT grew 21% to AUD 279m; underlying EPS up 11% to 35.1c.

• Statutory diluted EPS fell to 43.0c; underlying diluted EPS rose 11.1% to 35.1c.

• Operating cash flow up 6.7% to $644.4m; free cash flow $678m; closing group cash $1.34b.

• Net debt to EBITDA improved to 0.9x, below the 1-2x target range.

Outlook and guidance

• Expect continued strong demand and disciplined capacity growth, with domestic ASKs up 2%-3% in H2 and 3% in Q1 FY 2027.

• Forecast H2 EBIT and margins to exceed H2 FY 2025, with RASK growth of 3%-4%.

• CapEx guidance for FY 2026 is $850–950m, including purchase of Boeing 737-8 (Max) aircraft; leverage to remain at low end of target range.

• Gross transformation benefits to exceed $400m in FY 2026.

• Velocity external billings expected to grow >10%, with modestly lower margins.