Virgin’s half-year profits soar, but cost pressures loom
Virgin has posted a jump in half-year earnings supported by strong revenue growth and demand in the leisure sector.
Virgin’s pre-tax earnings rose 11.7 per cent to $490 million in the six months to the end of December 2025.
“Passenger demand remains strong, with consumers continuing to prioritise travel and connectivity, supporting the airlines segment,” Virgin chief executive Dave Emerson said on Friday.
The airline said its first half results were “underpinned” by $200 million in gross benefits from continued progress in the group’s transformation program—a plan to diversify product offerings and cut costs. With savings in fuel costs, the productivity gains partly offset inflationary headwinds, expanding the underlying pre-tax margin by 40 basis points to 14.8 per cent.
Underlying net profit rose to $279 million up 20.7 per cent on the first half.
Nevertheless, the Brisbane-based airline noted that “cost pressures persist across the industry” and that costs were growing “above inflation in several areas” including the supply chain, “airport charges and aircraft maintenance”.
Taxes paid
After exiting administration, Virgin has now fully utilised past tax losses, and the company is in a “tax paying position”.
Consequentially, net profit after tax fell in the half by 27.9 per cent to $341 million over the first half of fiscal year 2025.
Earnings per share fall 33.5 per cent over the first half of fiscal year 2025 to 43 cents.
“The changes… reflects the movement in underlying and statutory net profit after tax and the dilutionary impact of share options and share rights associated with the IPO,” the company said.
The company, of which 30.2 per cent is owned by Bain Capital, re-listed on the ASX in June.
“This is the last of the tax deductions related to the administration falling off so we’re back on to a normal operating footing for Virgin,” said Moomoo ANZ market strategist Michael McCarthy.
“Overall the results were a good one.“
“It’s a tough business, airlines and they’ve managed to increase profit by more than 20 per cent. Although the operating environment has improved,” said McCarthy.
“Virgin have clearly trimmed their sales and are taking advantage of a better operating environment.”
From our partners
