Virgin Australia spruiks $236m first half profit
Virgin Australia has told staff the airline made a profit of $236m in the first half of the 2024 financial year, in a ‘strong performance’.
Virgin Australia has told staff the airline made a profit of $236m in the six months to December 31, 2023.
The result represented an 8.5 per cent margin on the $2.8bn in revenue Virgin Australia collected in the period, up from 5 per cent ($125m) in the previous corresponding period.
In the 2023 financial year, Virgin Australia made a $129m profit over 12-months.
Relaying the results to staff, CEO Jayne Hrdlicka said the half year figures were “rough numbers” and represented a strong increase compared to the same period last year.
However she warned the second half would be more challenging for Virgin Australia, due to “aggressive market pricing and strong capacity growth”.
“We need to stay focused on the execution of our plans,” said Ms Hrdlicka.
No mention was made of her impending departure following the shock announcement last month Ms Hrdlicka was to transition out of the role of CEO.
It’s understood Virgin Australia’s owners Bain Capital had become unhappy with her performance, after a planned initial public offering of the airline was put indefinitely on hold.
Key executives employed to deliver the IPO resigned in recent months including head of investor relations Chris Vagg and former chief development officer David Marr.
Poor operational performance has also plagued Virgin Australia, which recorded the worst reliability of all major domestic carriers in January when one in three flights was delayed, and 5.4 per cent cancelled.
Ms Hrdlicka emailed Velocity frequent flyers last week, offering reassurance the airline was improving its performance, and was almost back to pre-Covid levels.
Data provided by Virgin Australia showed one in four flights was delayed in February, and 2.8 per cent axed.
In the months ahead, Virgin Australia faced further turmoil as pilots warned they would take industrial action if they did not receive an adequate pay rise.
Pilots agreed to salary cuts in the vicinity of 17 to 18 per cent in the Covid crisis, to help Virgin Australia get back on its feet in the wake of administration.
But the Australian Federation of Air Pilots that represents 75 per cent of Virgin Australia pilots, was now seeking to return to the pre-Covid pay structure with cost of living increases factored in.
To date, Virgin Australia has offered 15.2 per cent over three years.
AFAP senior industrial officer Patrick Larkins said the offer was “completely unrealistic and demonstrated the business was not listening, nor that it understood the level of anger among its workforce”.
“Virgin has a short window of opportunity over the coming months to reach an agreement with the AFAP,” said Mr Larkins.
“AFAP members at Virgin are closely watching bargaining across the industry and Virgin should take heed as to what happens when airlines do not properly value their pilots.”
Other employee groups including cabin crew have reached new agreements with Virgin Australia, incorporating pay rises and improved conditions.
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