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Virgin Australia made a nett profit of $129 million after taxes, which was the first time in 11 years that the company made money. Revenue more than doubled from the previous year to $5 billion as the company responded strongly to higher customer demand after COVID-19. The underlying EBIT was $439 million, which is 8.8% of the revenue.
The airline business of Virgin Australia made $4,873 million, which is 126% more than the previous year. This includes domestic, international, regional, and charter flights. EBIT was $362 million, which is a 7.4% margin.
Velocity, loyalty business, made $330 million, an increase of 68%. They had strong member growth throughout the year and now have 11.5 million members. With an underlying EBIT of $77 million, the margin was 23.4%.
Record-high demand for leisure travel and the return of SME customers to levels seen before COVID-19, along with the slower but still important return of corporate travellers, led to a significant increase in profits. Despite higher fuel prices, efforts to improve efficiency led to a substantial rise in profitability. Virgin Australia continues to see healthy demand as customers prioritise travel in the face of cost-of-living pressure.
“These results are an important milestone for Virgin Australia,” stated CEO Jan Hrdlicka. It has been 11 years since Virgin Australia returned to profit, and our results indicate that the business’s transformation 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, the 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.
Race Strauss, Virgin Australia CFO, said, “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.”
“Our balance sheet is now significantly stronger, and the business’s cost base has significantly improved in recent years.” Future transformation plans position us well to manage cost pressures while continuing to improve our business,” Mr Strauss added.
“Virgin Australia is in a very strong capital position, with total debt including leases now $2.3 billion and over $1bn of cash on the 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.”
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