After returning to profitability in FY23 for the first time in 11 years, Virgin Australia delivered an even stronger - and its best on record - performance in FY24, with underlying EBIT increasing by 18.2% to A$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 A$5.1 billion, an increase of 5.6%. Underlying EBIT was A$392 million, an increase of 8.2%, achieving a margin of 7.6%.
Velocity Frequent Flyer recorded revenue of A$409 million, an increase of 23.8%. Underlying EBIT was A$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 airline said that 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,” Ms 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.
“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.
“I am particularly pleased to present such a strong set of results that are the product of four years hard work by the wonderful and talented team at Virgin Australia. We have together rebuilt Virgin Australia as a profitable, customer centric, value carrier that celebrates its people as the centrepiece of its strategy. There is a well-defined plan for continued transformation which will deliver further customer, team and shareholder benefits.
“I want to thank each one of our team members and, of course, our customers for helping Virgin Australia find its place again as a wonderful and competitive airline. The collective achievement comes at an exciting time - with the proposed minority equity investment by the World’s Best Airline, Qatar Airways,” she said.
[2] Excluding Velocity related overheads.
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