Virgin’s half-year profits soar, but cost pressures loom
Virgin posted a rise in half-year earnings, boosted by strong revenue growth and demand in the entertainment 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, supporting the airline segment, as consumers continue to prioritize travel and connectivity,” said Virgin CEO Dave Emerson.
The airline said its first-half results were “supported” by a $200 million gross benefit from continued progress on the group’s transformation program – a plan to diversify product offerings and reduce costs. Productivity gains, combined with savings in fuel costs, partially offset the negative effects of inflation and increased the underlying pre-tax margin by 40 basis points to 14.8 percent.
Underlying net profit rose 20.7 percent to $279 million in the first half.
However, the Brisbane-based airline noted that “cost pressures continue across the industry” and that costs are rising “above inflation in many areas”, including the supply chain, “airport fees and aircraft maintenance”.
Taxes paid
Since leaving administration, Virgin has now fully benefited from past tax losses and the company is in a “taxpaying position”.
As a result, net profit after tax fell by 27.9 percent to $341 million in the first half of fiscal 2025.
Earnings per share fell 33.5 percent to 43 cents in the first half of fiscal 2025.
“The changes…reflect the movement in underlying and statutory net profit after tax and the dilutive effect of stock options and share rights associated with the IPO,” the company said.
The company, which is 30.2 percent owned by Bain Capital, was re-listed on the ASX in June.
“This is the latest in a series of tax cuts related to management failure, so we are back to normal operating status for Virgin,” Moomoo ANZ market strategist Michael McCarthy said.
“Overall the results were good.”
“Airlines are a tough business and they’ve managed to increase profits by more than 20 percent, although the operating environment has improved,” McCarthy said.
“Virgin has clearly reduced sales and is benefiting from a better work environment.”
