Virgin Australia (VGN) H1 2026 earnings summary

Executive summary

• Delivered strong 1HFY26 results with revenue up 9.3% and underlying EBIT up 11.7%, supported by robust demand, transformation benefits, and margin expansion.

• Transformation program delivered over $200m in gross benefits in 1HFY26, on track for >$400m in FY26 and >$1.1b since FY24.

• Velocity loyalty program achieved record external billings, EBIT up 14.8%, and active members up 11%.

• Customer satisfaction improved, with NPS up three points to 28 and operational performance leading mainline domestic airlines.

• Continued investment in fleet renewal and customer experience, including new aircraft deliveries and transformation initiatives.

Financial highlights

• Revenue grew 9.3% year-over-year to $3,323m, with underlying EBIT up 11.7% to $490m and EBIT margin rising 40bps to 14.8%.

• Underlying NPAT increased 20.7% to $279m; statutory NPAT fell 27.9% to $341m due to prior period deferred tax asset recognition.

• Underlying EPS up 11.1% to 35.1c; statutory EPS down to 43.0c.

• Net debt to EBITDA improved to 0.9x, below the 1-2x target range; group liquidity at $1.4bn.

• Free cash flow $678m; cash and term deposits increased by $223m to $1,341.5m.

Outlook and guidance

• Continued strong demand and disciplined capacity growth expected, with domestic ASKs up 2-3% in 2HFY26.

• RASK growth of 3-4% forecast for 2HFY26, supporting further earnings and margin accretion.

• FY26 capex guidance: $850-950m, including purchase of four Boeing 737-8 (Max) aircraft.

• Leverage expected at low end of 1-2x net debt/EBITDA by FY26 year-end.

• Velocity external billings expected to grow >10%, with modestly lower margins in H2.