A defining feature of Virgin Australia since its Phoenix-like rise from the ashes of financial implosion has been the airline’s focus on transformation. Despite all the extraneous noise around a public float and an equity tie-up with Qatar Airways, CEO Jayne Hrdlicka has kept the airline focused on delivering its transformation agenda, which has paid off handsomely in its 2024 financial year results.
A year of delivering for all stakeholders
This focus on transformation is now in its fourth year and has driven Virgin Australia’s return to profitability, contributing strongly to the increased earnings in the twelve months ended June 30, 2024 (FY24). The agenda focuses on revenue management and ancillary revenue, digital channels, fleet reconfiguration, operations productivity and ongoing cost reduction.
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Last financial year, the Virgin Australia Group recorded its first profit in eleven years. In FY24, it delivered an even stronger performance, with underlying earnings before interest and tax (EBIT) increasing by 18.2% to AU$519 million ($348m). The earnings increase was achieved despite supply chain constraints, unprecedented industry inflation and strong competition.
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Virgin Australia’s vital statistics are all on the rise
Group FY24 revenue increased year-on-year by 6.8% to AU$5.4 billion ($3.6b) and achieved an underlying EBIT margin of 9.7%, compared to 8.8% in FY23. Virgin Australia (VA) flew 19.2 million passengers and received six new Boeing 737 MAX 8s during the year while also reconfiguring 14 Boeing 737-800s with its latest-generation interiors.
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Virgin Australia’s airline business, which includes domestic, short-haul international and regional and charter flying, increased FY24 revenue by 5.6% to AU$5.1 billion ($3.4b) and generated underlying EBIT of AU$392 million ($263m) at a margin of 7.6%. VA added that the airline margin includes Group overheads, a legacy contract with Virgin Velocity and significant investment in frontline team member salaries that came into effect in FY24.
VA is delivering greater choice to Australians
Chief Executive Officer Jayne Hrdlicka said that this second consecutive year of profitability demonstrates the ongoing success of the airline’s transformation journey despite what has been a challenging year for our industry.
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Hrdlicka said that continued improvement in profitability means Virgin Australia is well-positioned to deliver great value and choice to Australian travelers, adding:
“It is essential to our ability to re-invest in our business and customer experience and vigorously compete with our major competitor. This year’s result is a credit to our incredible team and reflects the huge amount of work that continues in every part of our business to rebuild Virgin Australia as a stronger, more disciplined airline delivering attractive returns to our shareholders.”
Photo: Virgin Australia
In a more tangible thank-you, VA is giving all team members 54,000 Velocity Points, which is in addition to the AU$1000 ($670) travel credit team members receive each year to use on heavily discounted staff travel fares. Hrdlicka noted that since June, the airline had supported more than 130,000 stranded Rex and Bonza passengers to book free-of-charge flights and has supported domestic connections for more than 2,000 Australians repatriated from the Middle East by partner Qatar Airways.
On customer experience, in FY24 VA introduced baggage tracking across the domestic and international network and a self-service disruption management tool called Rapid Rebook, with more than 500,000 customers already using the system. The CEO said that the FY24 comes at an exciting time “with the proposed minority equity investment by the World’s Best Airline, Qatar Airways.”