Virgin Australia is profitable despite a challenging year and has posted earnings of $519m

Virgin Australia’s second consecutive year in the black has so delighted the airline that each employee is to receive 54,000 Velocity points and a $1000 travel voucher as a thank you.

Virgin Australia has boosted its earnings by 18 per cent in the 2024 financial year to $519m despite various challenges including slower-than-expected deliveries of new aircraft, fierce competition and high inflation.

The result was up from $439m in earnings the previous year in which Virgin reported a $129m net profit.

Monday’s announcement did not include details of an overall profit but CEO Jayne Hrdlicka said the airline was in the black for the second year in a row.

“Continued improvement in profitability means we are well positioned to deliver great value and choice to Australian travellers,” Ms Hrdlicka said.

“It is essential to our ability to reinvest in our business and customer experience, and vigorously compete with our major competitor.”

As well as delays in the delivery of new Boeing 737 Max 8s, Virgin has faced more heat from Qantas’ low fares subsidiary Jetstar which increased capacity on key domestic routes in the past year.

The airline has also agreed to a 21 per cent pay rise for its pilots over the next three years, to address pay cuts during the Covid pandemic.

In the same period Qantas saw its annual profit before tax fall from $2.47bn to $2.08bn due to increased spending on customer initiatives and moderating airfares.

Virgin Australia CEO Jayne Hrdlicka.

Ms Hrdlicka said Virgin’s improved result was a credit to the airline’s “incredible team” and that each employee would be rewarded with 54,000 Velocity points, as well as a $1000 travel voucher.

“I am particularly pleased to present such a strong set of results that are the product of four years of hard work by the wonderful and talented team at Virgin Australia,” she said.

“We have together rebuilt Virgin Australia as a profitable, customer-centric, value carrier that celebrates its people as the centrepiece of its strategy.”

The result was helped by the strong performance of its airline business, which recorded revenue of $5.1bn, an increase of 5.6 per cent and earnings before interest and tax of $392m.

The Velocity frequent flyer business contributed $409m in revenue and underlying earnings of $115m on the back of healthy membership growth, and a 13 per cent increase in active engagement.

Chief financial officer Race Strauss said the figures demonstrated the success of the airline’s transformation program which had offset inflation and strengthened the balance sheet, allowing further investments in customers and people.

“While we are operating in an environment of higher costs, our disciplined approach to cost management has enabled us to deliver even better value for our customers,” Mr Strauss said.

“In the 2025 financial year, Virgin Australia will build on this momentum continuing its focus on ensuring the execution of transformation initiatives which will be crucial to mitigating the ongoing impact of inflation.”

The profit comes as Virgin Australia weighs up the timing of an IPO and seeks government approval for the sale of a 25 per cent stake to Qatar Airways.

The proposed sale is under consideration by the Foreign Investment Review Board and the Australian Competition and Consumer Commission.

Ms Hrdlicka has said the investment by Qatar Airways would help Virgin compete more strongly in the domestic market, and return to long-haul international flying through a wet lease arrangement with the Gulf carrier.

An additional 28 flights a week to Doha from Sydney, Melbourne, Brisbane and Perth are slated to begin in July 2025.

The flights will be operated by Qatar Airways’ aircraft and crew and sold as Virgin Australia services.