Virgin Australia Returns to Profitability in FY23 for the First Time in 11 Years
Virgin Australia has reported a net profit of $129 million on a year-over-year increase in revenue of 124 percent to $5.0 billion, marking the carrier’s first profit in 11 years.
On Tuesday (October 10, 2023), Virgin Australia announced their financial results for fiscal 2023. The carrier reported a FY 2023 Statutory net Profit After Tax (NPAT) of $129 million, their first profit in 11 years, on a year-over-year increase in revenue of 124 percent to $5.0 billion. Virgin Australia’s FY23 underlying Earnings Before Interest and Tax (EBIT) was $439 million, a margin of 8.8 percent. The airline’s Velocity loyalty business revenue increased 68 percent versus FY22 to $330 million, delivering an underlying EBIT of $77 million, representing a margin of 23.4 percent.
In Tuesday’s announcement, Virgin Australia’s CEO, Jayne Hrdlicka, said,
“These results are an important milestone for Virgin Australia. It has been 11 years since Virgin Australia returned a profit, and our results signal that the transformation of Virgin Australia is progressing well. We have a long-term commitment to transformation and are only part-way through this multi-year journey. By creating a systemically lower cost base and a conservative balance sheet as well as investing heavily in technology and our frontline, we are well positioned for the future.
“Our investment in frontline transformation continues, and is designed to boost capability, customer experience and operational efficiency. Our recent announcement of a $110m cabin upgrade, arrival of the first of our new 737-8 aircraft, market leading baggage tracking app and Rapid Rebook technology launch all help us to create experiences our guests love. Value and choice are core to our business and as the continuing rise in cost-of-living impacts household budgets, we believe we are well positioned to continue to provide customers with the best value in the market.”
Also commenting on the airline’s FY23 financial results, Virgin Australia’s Chief Financial Officer, Race Strauss, said,
“Our balance sheet is now considerably stronger and the cost base of the business has significantly improved from recent years. Future transformation plans put us in a good position to manage cost headwinds and continue to improve our business. Virgin Australia is now in a very strong capital position, with total debt including leases now $2.3 billion and over $1bn of cash on balance sheet, providing the platform for future investment in transformation and growth. Our transformation plan is well underway and has set up the business for the future.”
During FY23, Virgin Australia took delivery of their first fuel-efficient Boeing 737-8 MAX, with a further seven to be delivered in FY24. An additional 25 Boeing 737-10 MAX jets are scheduled for delivery from FY25, reinforcing the carrier’s 2030 GHG emissions intensity target of 22.0 percent. Virgin Australia’s existing Boeing 737 fleet will also undergo a cabin refurbishment, which is estimated to cost approximately $110 million. During the financial year, the carrier hired over 1,800 new frontline team members, expanding their headcount to 7,340, and around 1,500 new frontline staff are expected to join the company over FY24.
Source: Virgin Australia