Virgin Australia Posts 28% NPAT Rise, Reaffirms FY26 Growth Outlook
Virgin Australia has delivered a strong FY25 performance with pro forma underlying NPAT up 27.8%, meeting prospectus targets, while reaffirming its FY26 outlook amid operational improvements and fleet expansion.
- Pro forma underlying NPAT of $331 million, up 27.8% on FY24
- Revenue grows 8.5% to $5.81 billion, underlying EBIT up 29.6%
- Airline segment shows improved load factor, on-time performance, and capacity growth
- Velocity loyalty program delivers double-digit revenue growth and record results
- Net debt maintained at low end of target range; FY26 outlook reaffirmed
Strong FY25 Financial Performance
Virgin Australia has reported its FY25 financial results, showcasing a robust recovery and operational momentum. The airline achieved a pro forma underlying net profit after tax (NPAT) of $331 million, a 27.8% increase over FY24, aligning precisely with its prospectus guidance. Revenue rose 8.5% to $5.81 billion, while underlying earnings before interest and tax (EBIT) surged 29.6% to $650 million, lifting the EBIT margin to 11.2%.
Despite this underlying strength, statutory NPAT declined by 12.3% to $479 million, reflecting the impact of significant items that warrant closer scrutiny by investors. Nonetheless, the core business metrics indicate solid operational execution and financial discipline.
Operational Excellence Driving Growth
The airline segment demonstrated marked improvements across key operational metrics. Available seat kilometres (ASK) grew by 4.2%, with a load factor climbing to 84.9%, up 1.9 percentage points from the prior year. On-time performance also improved significantly, rising to 76.8%, a 7.2 percentage point increase, underscoring enhanced operational reliability.
Revenue per available seat kilometre (RASK) increased to 16.5 cents, reflecting better yield management and pricing power. These gains were supported by a fleet expansion, with the narrowbody aircraft count expected to rise further in FY26, signaling confidence in sustained capacity growth.
Velocity Segment Delivers Record Results
The Velocity Frequent Flyer program continued its strong momentum, posting double-digit revenue growth and record underlying EBIT of $127 million. Active membership grew by 12%, with over 900,000 new members added during the year. This segment’s performance highlights the value of loyalty initiatives as a key driver of ancillary revenue and customer engagement.
Balance Sheet and Capital Allocation
Virgin Australia maintained a disciplined capital structure, with adjusted net debt to underlying EBITDA at the low end of its 1.0x to 2.0x target range. The company invested $496 million in capital expenditure, including fleet renewal and growth projects, while emphasizing a capital allocation framework that balances operational needs, growth investments, and shareholder returns.
Fuel hedging and fleet updates were highlighted as part of the FY26 outlook, which was reaffirmed in line with prospectus expectations. Sustainability and safety remain core pillars, with ongoing initiatives embedded across the business.
Looking Ahead
Virgin Australia’s FY25 results reflect a company on a clear growth trajectory, combining operational improvements with strategic investments in fleet and loyalty programs. The reaffirmed FY26 outlook suggests confidence in continuing this momentum, though market watchers will be keen to monitor how the airline navigates cost pressures and competitive dynamics in the year ahead.
Bottom Line?
Virgin Australia’s solid FY25 foundation sets the stage for growth, but investors will watch closely for execution risks in FY26.
Questions in the middle?
- What drove the divergence between statutory and underlying NPAT in FY25?
- How will fleet expansion impact cost structure and capacity in FY26?
- What are the key risks to Velocity’s continued revenue growth?
