Virgin Australia (VGN) H1 2026 earnings summary

Executive summary

• Achieved strong financial and operational performance in 1HFY26, with underlying EBIT up 11.7% to $490.4m and revenue up 9.3%, driven by robust demand and transformation benefits.

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

• Maintained a strong balance sheet with leverage at 0.9x net debt to EBITDA, below the 1-2x target range.

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

• No interim dividend declared for 1HFY26; focus remains on reinvestment and balance sheet strength.

Financial highlights

• Underlying EBIT: $490m, up 11.7% year-over-year; EBIT margin expanded to 14.8% (up 40bps); underlying NPAT: $279m, up 21%; statutory NPAT: $341m, down 27.9% due to prior period deferred tax asset recognition.

• Revenue: $3,323m, up 9.3% year-over-year; underlying EPS up 11% to 35.1c.

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

• Net debt to EBITDA at 0.9x, below target range.

• Operating cash flow up 6.7% to $644.4m; capital expenditure was $235m.

Outlook and guidance

• Demand for air travel expected to remain strong; 2-3% domestic capacity growth planned for 2HFY26.

• EBIT and EBIT margins forecasted to exceed H2 FY25 levels, with RASK growth of 3-4% in H2; gross transformation benefits to exceed AUD 400 million in FY26.

• CapEx guidance for FY26 is AUD 850 million–AUD 950 million, including purchase of Boeing 737-8 (Max) aircraft; leverage to remain at the low end of the target range.

• Net debt expected to rise in 2HFY26 with planned aircraft acquisitions but remain within target range.

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