Virgin Australia FY26 Underlying EBIT Up 13.4%

Virgin Australia Holdings Limited (ASX:VGN) reported underlying EBIT of $753 million for the year ended 30 June 2026, up 13.4 per cent on FY25, with the underlying EBIT margin, which the company calculates as underlying EBIT divided by underlying revenue, expanding 60 basis points to 12.0 per cent. Underlying net profit after tax, which excludes significant items, rose 21.9 per cent to $404 million and diluted underlying earnings per share increased 12.9 per cent to 50.9 cents, while statutory NPAT rose 4.7 per cent to $501 million. The company said the result was underpinned by more than $450 million in gross Transformation Program benefits during FY26 which, combined with effective fuel hedging and benefits from newer, more fuel-efficient aircraft, partly offset above-inflation cost increases, particularly in airport charges and labour. The board declared a fully franked dividend of 7.6 cents per ordinary share, the first since Virgin Australia re-listed in 2025, with a record date of 15 September 2026 and a payment date of 15 October 2026.

The Airlines segment recorded underlying EBIT of $616 million, up 15.2 per cent, on underlying revenue up 8.0 per cent to $6.0 billion, with the segment underlying EBIT margin expanding 60 basis points to 10.2 per cent. RASK increased 5.9 per cent and total capacity increased 1.8 per cent, with domestic capacity growth of 2.9 per cent partly offset by a 4.5 per cent decline in short-haul international capacity; the airline carried 21.3 million passengers, up 3.2 per cent, with load factor stable at 84.9 per cent. CASK increased 5.1 per cent and CASK excluding fuel increased 7.0 per cent, principally due to higher airport charges, labour and depreciation. Velocity delivered underlying EBIT of $143 million, up 12.3 per cent, on underlying revenue up 8.1 per cent to $487 million. At 30 June 2026 net debt including capitalised lease liabilities was $1.2 billion, or 0.9 times underlying EBITDA, below the target range of 1 to 2 times; total cash, cash equivalents and term deposits were $1.8 billion and available liquidity through unrestricted cash was approximately $1.6 billion. Based on the forward fuel curve as at 25 August 2026, Virgin Australia expects 1HFY27 underlying EBIT to be broadly in line with 1HFY26, assuming domestic capacity reduces 3 per cent and RASK grows 6 to 8 per cent in the half, and expects Velocity FY27 underlying EBIT to be broadly in line with FY26 as Reserve Bank of Australia interchange fee changes and investment offset continued billings growth.