Virgin Australia has posted a 21.9 per cent increase in underlying net profit to $404 million for FY26, with strong demand, fleet renewal and its transformation program helping offset rising costs.
Underlying EBIT rose 13.4 per cent to $753 million for the year ended 30 June 2026, while revenue increased 8.0 per cent to $6 billion.
The airline’s underlying EBIT margin expanded 60 basis points to 12.0 per cent, while statutory net profit after tax rose 4.7 per cent to $501 million.
Virgin also declared a fully franked dividend of 7.6 cents per share, its first since returning to the ASX in 2025.
The airline said strong customer demand, disciplined capacity management, effective fuel hedging and more than $450 million in gross benefits from its Transformation Program supported the result.
The transformation benefits helped offset above-inflation cost pressures, particularly across airport charges and labour.
Virgin’s balance sheet also remained strong, with net debt at 0.9x underlying EBITDA, below its 1 to 2x target range. Available liquidity stood at $1.6 billion and return on invested capital increased 140 basis points to 20.1 per cent.
Airlines segment drives growth
Virgin Australia’s Airlines segment delivered underlying EBIT of $616 million, up 15.2 per cent.
Revenue increased 8.0 per cent to $6 billion, while the segment’s EBIT margin expanded 60 basis points to 10.2 per cent.
RASK increased 5.9 per cent, with domestic capacity growing 2.9 per cent and short-haul international capacity falling 4.5 per cent.
The airline carried 21.3 million passengers during the year, up 3.2 per cent, while load factor remained steady at 84.9 per cent.
Virgin took delivery of 17 aircraft during FY26, including 13 Boeing 737-8 MAX aircraft and four Embraer E190-E2s.
The fleet renewal brought the average fleet age down to 11.5 years.
Velocity continues double-digit growth
Velocity delivered underlying EBIT of $143 million, up 12.3 per cent.
Revenue increased 8.1 per cent to $487 million, while external billings rose 12.4 per cent.
Active membership grew 9 per cent, with more than 800,000 new members joining during the year.
Points redemption reached a record 38.6 billion, up 4.6 per cent.
Velocity’s EBIT growth is expected to moderate in FY27 following changes to RBA interchange fees from 1 October and increased investment in a three-year transformation program.
Virgin is nevertheless targeting low double-digit EBIT compound annual growth across Airlines and Velocity through to FY29.
Operations continue to improve
Virgin’s on-time performance increased 30 basis points to 77.1 per cent and exceeded 80 per cent in the June quarter.
Completion improved to 98.7 per cent, which Virgin said was the best among Australia’s major domestic carriers.
Strategic Net Promoter Score also increased three points to 30.
CEO Dave Emerson said the result showed Virgin had “become a stronger and more resilient airline”.
“Our strategy is working. We have built a simpler, more focused business with a primarily domestic network, targeted short-haul international services and global connectivity through our airline partners,” he said.
CFO Race Strauss said the airline would continue to invest in fleet renewal and technology while maintaining balance sheet discipline, describing the Transformation Program as “becoming an enduring capability” within the business.
Qantas comparison
The result comes a day after Qantas reported a $2.06 billion underlying profit before tax for FY26, down $330 million on the previous year.
Qantas also declared a $300 million fully franked final dividend, following a $300 million interim dividend paid in April.
Virgin’s result was supported by effective fuel hedging as fuel costs rose sharply during the year, while Qantas said its fuel bill increased by $610 million.
The two airlines also recorded similar growth across their loyalty businesses, with Velocity EBIT rising 12.3 per cent and Qantas Loyalty EBIT increasing 12 per cent.
FY27 outlook
Virgin expects underlying EBIT to be broadly flat in FY27, with first-half EBIT expected to be in line with the first half of FY26.
Domestic capacity is expected to fall 3 per cent in the first half, while RASK is forecast to grow 6 to 8 per cent.
Fuel costs are expected to be around $700 million for the first half, with FY27 capital expenditure guided at $900 million to $1 billion.
Despite the broadly flat EBIT outlook for FY27, Virgin is targeting low double-digit EBIT growth across its Airlines and Velocity businesses through to FY29.
