Skip to content
Home » Airlines » Virgin Australia Returns to Profit: EBIT $439 Million

Virgin Australia Returns to Profit: EBIT $439 Million

Virgin Australia returns to profitability in FY23, and the airline’s transformation plan is underway.

Virgin Australia has achieved a noteworthy milestone by returning to profitability after 11 years. The company reported a net profit after tax (NPAT) of $129 million. Revenue also saw a significant increase, more than doubling compared to the previous year, reaching $5 billion. This growth can be attributed to the airline’s strong response to the surge in customer demand following the COVID-19 pandemic. The underlying earnings before interest and taxes (EBIT) amounted to $439 million, with a margin of 8.8%.

Virgin Australia returns to profit in FY23, and the airline's transformation plan is underway.
Image: Virgin Australia
  • Group revenue of $5 billion, an increase of 124% over FY22.
  • Underlying Earnings Before Interest and Tax (EBIT) of $439 million, a margin of 8.8%. 
  • Virgin Australia’s execution of its multi-year transformation plan continues and is fundamental to this achievement.
  • Statutory Net Profit After Tax (NPAT) of $129 million, the first profit achieved in 11 years.
  • Eligible frontline team members have received 6.5% of their salary in additional bonuses over a 12-month period, total of $26 million in bonuses paid to frontline staff in FY23. All team members also receive $1,000 travel credit every year.
  • First Boeing 737-8 joined Virgin Australia fleet, with another 7 to be delivered during FY24. A further 25 Boeing 737-10 aircraft are planned for delivery from FY25, anchoring to our 2030 greenhouse gas emissions intensity reduction target of 22%.[1]
  • The Boeing 737 fleet will undergo a cabin refurbishment estimated to cost approximately $110 million.
  • In FY23, over 1,800 frontline staff were hired, the total team headcount reached 7,340, and an additional approximately 1,500 frontline staff to be hired over FY24.
  • Velocity Frequent Flyer members reached 11.5 million.
  • Short-haul international routes commenced, including Tokyo, Queenstown, Samoa, and Vanuatu.

Virgin Australia Airline Business Revenue: $4.8 billion

Virgin Australia’s Airline business, which encompasses domestic, international, regional, and charter flights, recorded a revenue of $4,873 million, marking a remarkable 126% increase due to heightened flying activity. The underlying EBIT for this segment was $362 million, with a margin of 7.4%.

Significant Loyalty Growth

Furthermore, the loyalty business arm known as Velocity witnessed significant growth, with revenue reaching $330 million, a notable 68% increase. This revenue stems from growth in new loyalty program members, resulting in 11.5 million members. The underlying EBIT for Velocity was $77 million, demonstrating a margin of 23.4%.

A Surge in Leisure Travel Deman

The record-breaking surge in leisure travel demand, combined with the return of small and medium-sized enterprise (SME) customers to pre-COVID levels and a gradual recovery of corporate travel, contributed to the substantial revenue growth. Despite the challenges of higher fuel prices, the company successfully implemented efficiency initiatives that increased profitability.

Virgin Australia remains optimistic about the continued demand for travel, as customers prioritize travel experiences despite the prevailing cost-of-living pressures.

Comments from Virgin Australia CEO Jayne Hrdlicka:

“These results are an important milestone for Virgin Australia. It has been 11 years since Virgin Australia returned a profit, and our results signal that the transformation of Virgin Australia is progressing well. We have a long-term commitment to transformation and are only part-way through this multi-year journey,” Ms Hrdlicka said.

“By creating a systemically lower cost base and a conservative balance sheet and investing heavily in technology and our frontline, we are well positioned for the future.

“Our investment in frontline transformation continues and is designed to boost capability, customer experience, and operational efficiency. Our recent announcement of a $110m cabin upgrade, the arrival of the first of our new 737-8 aircraft, market-leading baggage tracking app, and Rapid Rebook technology launch all help us to create experiences our guests love.

“Value and choice are core to our business, and as the continuing rise in cost-of-living impacts household budgets, we believe we are well positioned to continue to provide customers with the best value in the market.”

Comments from Virgin Australia CFO Race Strauss:

“Our balance sheet is now considerably stronger, and the cost base of the business has significantly improved from recent years. Future transformation plans put us in a good position to manage cost headwinds and continue to improve our business,” Mr Strauss said.

“Virgin Australia is now in a very strong capital position, with total debt including leases now $2.3 billion and over $1bn of cash on the balance sheet, providing the platform for future investment in transformation and growth. Our transformation plan is well underway and has set up the business for the future.”

Leave a Reply

Your email address will not be published. Required fields are marked *

Cookie Consent with Real Cookie Banner