Virgin Australia Holdings Limited (ASX:VGN) announced its results for the year ended 30 June 2026 (FY26) on 28 August 2026. The company reported underlying net profit after tax (NPAT) of $404 million, underlying EBIT of $753 million, up 13.4%, and declared a fully Franked Dividend of 7.6 cents per ordinary share, its first dividend since re-listing in 2025.

WHAT VIRGIN AUSTRALIA DOES

Virgin Australia Holdings Limited was founded in 2000 and describes itself as one of the largest Australian airlines. It operates an extensive domestic network, short-haul international services, charter and cargo operations, and the Velocity Frequent Flyer loyalty program.

Velocity members can use points to redeem flights to more than 600 destinations through Virgin Australia and its international partner airlines. The company employs more than 8,500 people.

FY26 FINANCIAL AND OPERATING RESULTS

Underlying NPAT was $404 million, up 21.9%, and diluted underlying Earnings Per Share were 50.9 cents, up 12.9%. Statutory NPAT was $501 million, up 4.7%. Underlying EBIT Margin was 12.0%, up 60 basis points, and return on invested Capital was 20.1%, up 140 basis points. The company said underlying results exclude significant items and were supported by more than $450 million in gross Transformation Program benefits, along with fuel hedging and newer, more fuel-efficient aircraft, which partly offset above-inflation cost increases in airport charges and labour.

Net Debt including capitalised Lease liabilities was $1.2 billion, or 0.9 times underlying EBITDA, below the target range of 1 to 2 times. Available Liquidity was approximately $1.6 billion, and total cash, cash equivalents and term deposits were $1.8 billion.

The Airlines segment recorded underlying EBIT of $616 million, up 15.2%, on underlying Revenue of $6.0 billion, up 8.0%. Revenue per available seat kilometre (RASK) rose 5.9%, while total capacity rose 1.8%. Cost per available seat kilometre (CASK) rose 5.1%, and CASK excluding fuel rose 7.0%. The airline carried 21.3 million passengers, up 3.2%, with load Factor stable at 84.9%.

Velocity delivered underlying EBIT of $143 million, up 12.3%, with underlying revenue up 8.1% to $487 million. External billings grew 12.4%, active members increased 9% and more than 800,000 new members joined. Points Redemption reached a record 38.6 billion, up 4.6%.

DIVIDEND, FLEET AND FY27 OUTLOOK

The 7.6 cents per share dividend has a Record Date of 15 September 2026 and a payment date of 15 October 2026. The company said future dividends will be determined every six months under its Capital Allocation Framework.

Seventeen new aircraft were delivered during FY26, comprising 13 Boeing 737-8 aircraft and four Embraer E190-E2 aircraft, reducing the average fleet age to 11.5 years. It expects to purchase five Boeing 737-8 and two Embraer E190-E2 aircraft in FY27.

For FY27, the company said consumers continue to prioritise travel and that, based on the forward fuel curve, underlying EBIT for the first half is expected to be broadly in line with the first half of FY26. Assumptions include a 3% reduction in domestic capacity in the first half, RASK growth of 6% to 8%, fuel costs of about $700 million, Capital Expenditure of $0.9 billion to $1.0 billion and Leverage towards the low end of the 1 to 2 times range. Significant items excluded from FY27 underlying results are expected to be about $40 million.

For Velocity, FY27 underlying EBIT is expected to be broadly in line with FY26, as Reserve Bank of Australia interchange fee changes expected from 1 October 2026 and Investment in a three-year transformation program offset continued billings growth. The company is targeting low double-digit EBIT growth for Velocity in FY28 and FY29.

RISKS AND WHAT TO WATCH

The announcement refers to above-inflation cost increases, particularly airport charges and labour, with CASK excluding fuel rising 7.0%. Chief Executive Officer Dave Emerson said the cumulative impact of rising costs across parts of the aviation Supply chain, particularly airport charges, remains a concern. The outlook is based on the forward fuel curve as of 25 August 2026, with hedging of 96% for Brent and 20% for refining margins for the remainder of the first half.

Velocity redemption levels were lower than expected, which the company linked partly to a temporary reduction in available long-haul flights associated with the Middle East conflict. Short-haul international capacity declined 4.5% in FY26. The FY27 outlook section contains forward looking statements.

NEXT MILESTONES

Key dates include the dividend record date of 15 September 2026 and payment date of 15 October 2026, and the start of the Reserve Bank of Australia interchange fee changes on 1 October 2026. The company expects a fleet of 110 operated aircraft, excluding wet-lease aircraft, by 30 June 2027. Further updates will follow in line with the company's first half FY27 reporting and its dividend determinations every six months.