The Virgin Australia Holdings Ltd (ASX: VGN) share price is in focus after the airline reported a 11.7% lift in underlying EBIT for the first half of FY26, with underlying NPAT up 20.7% to $279 million despite ongoing industry cost pressures.
What did Virgin Australia report?
- Revenue: $3.32 billion, up 9.3% on 1HFY25
- Underlying EBIT: $490 million, up 11.7%
- Underlying NPAT: $279 million, up 20.7%
- Statutory NPAT: $341 million, down 27.9% due to prior period tax benefits
- Underlying EBIT margin: 14.8%, up 40bps
- Net debt to underlying EBITDA: 0.9x, below target range
What else do investors need to know?
Virgin Australia’s transformation program delivered over $200 million in gross benefits, partially offsetting inflationary headwinds like airport charges. The company’s strong financial position is supported by $1.4 billion in liquidity and a net debt position well below its target range, even as it plans to purchase more aircraft in the second half.
Operationally, the airline achieved a domestic on-time departure rate of 72.6% and maintained a completion rate ahead of its competitors. Customer satisfaction continues to rise, with a three-point increase in Net Promoter Score and over 700,000 new Velocity members added during the half.
What did Virgin Australia management say?
Chief Executive Officer and Managing Director Dave Emerson said:
The Group’s continued strong performance clearly demonstrates that our constant focus on transformation and innovation is not only delivering strong financial outcomes but strengthens our ability to remain a robust competitor for years to come.
Virgin Australia is proud to play a critical role in delivering choice and value for Australian travellers, and we are laser-focused on serving our core customer groups of premium leisure, small and medium enterprises, and value-conscious corporates. Through careful cost management and decision making, we are striking the right balance between value, flexibility and quality, and our customers are responding well.
What’s next for Virgin Australia?
The airline expects demand for air travel to stay strong, with plans to increase domestic capacity by 2â3% in the second half of FY26 and 3% in early FY27. Virgin Australia targets continued EBIT growth, ongoing benefits from its transformation program, and growth in the Velocity loyalty business.
Investments include further aircraft purchases, with capex of $850â950 million anticipated for FY26, and much of the fleet will be upgraded with Wi-Fi. Ongoing discipline in capacity and cost management aims to keep the balance sheet strong and support future shareholder returns.
Virgin Australia share price snapshot
For the year to date, Virgin Australia shares have declined 9%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 5% over the same period.
The post Virgin Australia posts 1HFY26 earnings appeared first on The Motley Fool Australia.
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