Virgin Australia (VGN) H1 2026 earnings summary

Executive summary

• Delivered strong first half FY 2026 results, with revenue up 9.3% year-over-year and underlying EBIT up 11.7%, driven by robust leisure demand and transformation program benefits.

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

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

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

• Maintained focus on operational excellence, customer experience, and disciplined capacity management, with improved NPS and record passenger numbers.

Financial highlights

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

• Underlying NPAT grew 20.7% to $279 million; underlying EPS up 11.1% to 35.1c.

• Statutory EPS fell to 43.0c; statutory NPAT down 27.9% to $341.1 million.

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

• Operating cash flow was $644 million; group liquidity at $1.4 billion, including $1.1 billion in cash.

Outlook and guidance

• Continued strong demand and disciplined capacity growth expected, with domestic ASKs up 2-3% in H2 and 3% in Q1 FY27.

• H2 EBIT and margins forecast to exceed H2 FY25, with RASK growth of 3-4%.

• FY26 capex guidance is $850-950 million, 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 over 10%, with modestly lower margins.