Virgin Australia (VGN) H2 2025 earnings summary

Executive summary

• Achieved or exceeded all key FY25 financial metrics outlined in the Prospectus, with strong underlying earnings and revenue growth across both Airline and Velocity segments.

• Transformation Program delivered over $450m in gross benefits, supporting margin expansion and operational improvements.

• Maintained a conservative balance sheet, with net debt at the low end of the target range and robust liquidity.

• Commenced long-haul flying with Qatar Airways and expanded Velocity Frequent Flyer program.

• Customer satisfaction improved, with Net Promoter Score up 4 points to 27.

Financial highlights

• Revenue reached $5,810m, up 8.5% year-over-year and marginally ahead of the prospectus.

• Pro forma underlying EBIT was $650m, up 29.6% year-over-year, with an 11.2% margin.

• Pro forma underlying NPAT was $331m, up 27.8% year-over-year and in line with the prospectus.

• Statutory NPAT was $479m, down 12.3% year-over-year due to IPO and Qatar investment transaction costs and non-recurring FY24 benefits.

• Adjusted net debt to pro forma underlying EBITDA at 1.1x, at the low end of the 1-2x target range.

Outlook and guidance

• FY26 outlook reaffirmed, expecting continued growth in revenue and underlying profit, supported by demand, Transformation Program, and Velocity growth.

• Airlines segment expects demand and capacity growth in line with GDP, with 13 new Boeing 737-8 (Max) and four Embraer E190-E2 deliveries by June 2026.

• RASK growth of 3-5% expected in 1HFY26; fuel costs managed through hedging, with 93% of 1HFY26 exposure hedged.

• Velocity segment anticipates double-digit growth in external billings and membership.

• Transformation Program to deliver ~$400m gross benefit in FY26, split roughly half between cost and revenue initiatives.