Virgin’s profit dented by post-administration tax bill
Virgin Australia is paying retroactive tax after leaving administration and returning to the stock market more than five years ago.
The carrier’s first reported interim net profit since its relisting in June fell almost 28 percent to $341 million.
The decline in the first half was a result of the 30 per cent effective tax rate established after he left administration in late 2020.
“Due to the continued profit making since coming out of administration, any tax losses have been fully exploited and Virgin Australia is now in a tax-paying position,” it said in a statement on Friday.
The airline’s underlying earnings (before interest and tax) in the first half of 2025/26 rose by almost 12 per cent to $490 million.
The result was driven by revenue growth of 9.3 per cent in the six months ended December, driven by strong demand, particularly in the leisure market.
There was a 6.4 percent increase in revenue per available seat kilometer.
Virgin carried more than 11 million passengers across Australia and to international destinations in the second half of the year; This means an increase of 3.4 percent compared to the same period last year.
“However, cost pressures continue across the industry, with costs rising above inflation in several areas of the aviation supply chain, including airport charges and aircraft maintenance,” CEO Dave Emerson said.
“The aviation industry needs to remain mindful of costs to ensure aviation does not become unaffordable for Australians.”
Mr Emerson’s remarks echoed those said by Qantas CEO Vanessa Hudson on Thursday.
Going forward, Virgin forecasts continued growth in earnings before interest and tax in the second half of the financial year.
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