Virgin Australia (VGN) H2 2026 earnings summary

Executive summary

• Achieved strong and sustainable earnings growth and margin expansion in FY 2026 despite inflationary and geopolitical pressures, driven by resilient demand, disciplined capacity management, and ongoing transformation initiatives.

• Transformation Program delivered over AUD 1.1 billion in gross benefits over three years, supporting resilience and competitiveness.

• Declared inaugural fully franked dividend of AUD 0.076 (7.6 cents) per share following relisting in 2025, reflecting robust financial performance and balance sheet strength.

• Continued investment in Velocity, fleet renewal, AI, and people to support long-term competitiveness and sustainable growth.

• Operational performance improved, with on-time performance at 77.1% and completion rate at 98.7%.

Financial highlights

• Underlying EBIT increased 13.4% to AUD 753 million; EBIT margin expanded 60 bps to 12%.

• Statutory NPAT rose 4.7% to AUD 501 million; underlying NPAT up 21.9% to AUD 404 million.

• Revenue grew 8.1% to AUD 6.278 billion; underlying EBITDA up 15% to AUD 1.24 billion.

• Diluted underlying EPS increased 12.9% to AUD 0.509; ROIC improved 140bps to 20.1%.

• Operating cash flow reached AUD 1.3 billion; cash balance increased to over AUD 1.8 billion.

Outlook and guidance

• FY 2027 domestic capacity expected to reduce by 3% in H1; RASK growth guided at 6%-8%.

• Transformation and cost discipline to partly offset inflation; CASK ex fuel growth to remain below RASK.

• First half FY 2027 underlying EBIT expected broadly in line with prior year.

• Velocity EBIT for FY 2027 expected flat year-over-year due to RBA fee reset and investment ramp-up; double-digit EBIT growth targeted for FY 2028 and FY 2029.

• FY 2027 CapEx forecasted at AUD 900 million–1 billion, mainly for fleet purchases.