The Virgin Australia Holdings Ltd (ASX: VGN) share price is in focus today after the airline posted a 13.4% rise in underlying EBIT to $753 million for FY26, alongside its first fully-franked dividend of 7.6 cents per share since re-listing.
What did Virgin Australia report?
- Underlying EBIT of $753 million, up 13.4% on FY25
- Underlying NPAT $404 million, up 21.9% year on year
- Statutory NPAT $501 million, up 4.7% on FY25
- Underlying EBIT margin expanded 60bps to 12.0%
- Fully-franked dividend of 7.6 cents per share declared
- ROIC increased to 20.1%, up 140bps
What else do investors need to know?
Virgin Australia says strong customer demand, effective fuel hedging, and benefits from its Transformation Program supported its earnings growth and helped offset rising costs, particularly in labour and airport charges. The airline finished FY26 with a conservative balance sheet: net debt at $1.2 billion represents a leverage ratio below its target range and available liquidity is $1.6 billion.
Operational performance also improved, with on-time rates up to 77.1% and completion rates at 98.7%. The Velocity Frequent Flyer program continued to grow, with external billings up 12.4% and more than 800,000 new members joining during FY26.
What did Virgin Australia management say?
Commenting on the results, Virgin Australia’s CEO, Dave Emerson, said:
Our FY26 results demonstrate that Virgin Australia has 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. That strategy, together with the continued benefits of our Transformation Program, has strengthened the quality of our earnings and positioned us well for the future…. The declaration of our inaugural dividend since re-listing reflects confidence in the strength of the business, while maintaining the disciplined approach to investment and capital allocation that will support sustainable long-term growth.
What’s next for Virgin Australia?
Looking ahead, Virgin Australia expects continued strong travel demand to support earnings. For 1H FY27, underlying EBIT is forecast to be broadly in line with the prior period, with disciplined capacity reductions, ongoing Transformation Program benefits, and planned investments in newer, more efficient aircraft.
The company aims to grow its owned fleet and maintain financial discipline, targeting capex of $0.9â1.0 billion in FY27. Velocity earnings are expected to hold steady next year, with investment in loyalty transformation aiming to drive double-digit earnings growth from FY28 onwards.
Virgin Australia share price snapshot
The Virgin Australia share price has underperformed the S&P/ASX 200 index (ASX: XJO) over the past 12 months with a decline of almost 20%.
The post Virgin Australia posts robust FY26 results and first dividend since re-listing appeared first on The Motley Fool Australia.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.