Virgin Australia has revealed a $2.8 billion revenue in the six months to 31 December, up $300 million from one year earlier, and a profit of $236 million as outgoing CEO Jayne Hrdlicka warned of turbulence ahead.
Hrdlicka said it was a, “strong performance by all parts of the business,” though continued, “The second half of the year will be tough with aggressive market pricing and strong capacity growth and we (Virgin) need to stay focused on the execution of our plans.”
The news follows a recent announcement that Hrdlicka will depart from the top job, saying the time was right as the company enters its next phase of transformation, which includes the delivery of an IPO (initial public offering).
The IPO has been long talked about by owners Bain Capital. It was widely reported last year that it would happen in the second half of 2023, though stalled, and now looks likely for 2024.
It is understood Bain Capital has been unimpressed with performance for up to 12 months with some sources remarking the equity firm believes Hrdlicka was “clearly not capable of executing” strategies to maximise benefits from Qantas 2023 woes.
Key areas of complaint include a full-year profit of $129 million (5 per cent of rival Qantas’ $2.45 billion in the same period) as well as delay and cancellation rates which saw Virgin trailing Jetstar.
A recent JPMorgan note to clients estimated that Qantas domestic yields were 7 per cent down in December, while Virgin was down 15 per cent.
There is no set date for the end of Jayne Hrdlicka’s tenure, although she will reportedly wait until a replacement is found.
