After returning to profitability in FY23 for the first time in 11 years, Virgin Australia delivered an even stronger performance in FY24, with underlying EBIT increasing by 18.2% to $519 million. This result was achieved despite various challenges, which include supply chain constraints, unprecedented industry inflation and strong competition. The Group result represents an underlying EBIT margin of 9.7%, which is up from 8.8% in FY23.
Virgin Australia’s airline business (which includes domestic, short-haul international, and regional/charter flying) recorded revenue of $5.1 billion, an increase of 5.6%. Underlying EBIT was $392 million, an increase of 8.2%, achieving a margin of 7.6%. The airline margin is inclusive of Group overheads[2], a legacy contract with Velocity and significant investment in frontline team member salaries that came into effect during FY24.
Velocity Frequent Flyer recorded revenue of $409 million, an increase of 23.8%. Underlying EBIT was $115 million, a margin of 28.2%. Velocity delivered strong member engagement with a 13% increase in active members and growing its base to 12 million members.
The ongoing transformation agenda, now in its fourth year, has been critical to Virgin Australia’s return to profitability with continued strong contribution during FY24. Key areas of transformation focus include revenue management and ancillary revenue, digital channels, fleet reconfiguration, operations productivity and ongoing cost reduction. Velocity strategy execution delivered growth in the number of partners and products that earn points and the number of engaged members as well as program cost efficiency.
In FY24, the airline continued to invest in new, more fuel efficient aircraft and first-to-market customer innovations. This included baggage tracking across the domestic and international network and a self-service disruption management tool called Rapid Rebook. Over 500,000 customers have already taken advantage of this self-service rebooking functionality.
Virgin Australia Chief Executive Officer Jayne Hrdlicka said: “Virgin Australia has delivered a very strong performance in FY24. This is our second consecutive year of after-tax profit following the FY23 milestone of returning the business to profitability for the first time in 11 years. This strong performance demonstrates the ongoing success of our transformation journey, despite what has been a challenging year for our industry,” Hrdlicka said. “Continued improvement in profitability means we are well-positioned to deliver great value and choice to Australian travellers. It is essential to our ability to re-invest in our business and customer experience, and vigorously compete with our major competitor. This year’s result is a credit to our incredible team and reflects the huge amount of work that continues in every part of our business to rebuild Virgin Australia as a stronger, more disciplined airline delivering attractive returns to our shareholders.
“To acknowledge and thank our people for their contribution we are gifting all team members 54,000 Velocity Points. This is in addition to the $1,000 travel credit our team members receive each year to use on our heavily discounted staff travel fares,” Hrdlicka said. “Our team works hard every day to earn the trust, respect and loyalty of Australians everywhere and we are proud to be Australia’s most loved airline. Supporting the Australian community in times of need is a core part of our culture. I am really proud that since June the Virgin Australia team has supported more than 130,000 stranded Rex and Bonza customers to book free-of-charge flights. Equally, we have been pleased to support domestic connections for our partner Qatar Airways in their repatriation of over 2,000 Australians from the Middle East.”
Virgin Australia Chief Financial Officer Race Strauss said: “This is a strong result that demonstrates the success of our transformation program which has offset cost inflation and strengthened our balance sheet, enabling further strategic investments in our customers and people. While we are operating in an environment of higher costs, our disciplined approach to cost management has enabled us to deliver even better value for our customers. In FY25, Virgin Australia will build on this momentum continuing its focus on ensuring the execution of transformation initiatives which will be crucial to mitigating the ongoing impact of inflation.”
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