Virgin FY25 results

[Saab34]

Today they release FY25 results to the market listed as ASX:VGN. Webcast will be at 1030, Presentation will be released to the ASX within the next hour.

Numbers had been forecasted in the Prospectus, not sure if we will see any further announcements today in regards to anything else ie more fleet.

Early days but share price trending north, some have a BUY $3.90 short term on it.

Webcast here: Virgin Australia - FY25 Result Market Briefing

 

[markis10]

Things slightly better than forecast, more planes arriving sooner than forecast by a few units, otherwise a steady ship sailing in calm waters

 

[Harrison_133]

Documents have hit the ASX.

FY25 result overview

• Pro forma underlying NPAT: $331m (up 27.8% on FY24)
• $479m Statutory NPAT (Down 12.3% on FY24)
• Pro forma underlying EBIT: $650m (up 29.6% on FY24)
• Revenue: $5,810m (up 8.5% on FY24)
• Pro forma underlying EBIT margin: 11.2% (up 1.8% on FY24)

Airline segment overview

• Underlying EBIT: $535m (up $143m on FY24)
• Underlying EBIT margin: 9.6% (up from 7.6% on FY24)
• ASK growth: 4.2%
• RASK growth: 4.0%
• Load Factor: 84.9% (up from 83.0% on FY24)
• On Time Performance: 76.8% (up from 69.6% on FY24)
• Strategic Net Promoter Score: 27 (up 4 points on FY24)

Velocity segment overview

• Underlying EBIT: $127m (up $12m on FY24)
• Underlying EBIT margin: 28.3% (up from 28.2% on FY24)
• Underlying revenue: $450m (up 10.0% on FY24)
• 900,000+ new members
• 12% growth in active members

Fleet updates

• 1 737-8 due for delivery in July 2026 brought forward to June 2026
• 6 737-800 exits by June 2026

Source: https://cdn-api.markitdigital.com/a...23&v=c2533a54e2514fb77a8f93f84db686e1125273e9

 

[moa999]

From the airline table.
VA to begin retiring 737s with six departing FY26.
VARA to cease flying both F100s and A320s in FY26.

Allowed for by delivery of 13 MAX8s and 4 E2s in FY26 - a much higher cadence than for QF.

 

[LionKing]

So the so-called enhancements to the frequent flyer program actually did upped the budget bottom line for Virgin Australia instead of destroying them.
I suppose that's because the travel demand is so huge that the two airlines are riding the wave now.

 

[SeatBackForward]

I suppose that's because the travel demand is so huge that the two airlines are riding the wave now

I'm going to struggle to correctly reference this comment, it may have been a former chairman of Qantas, who said "there's room for one and half airlines in Australia".

 

[leesionn]

So the so-called enhancements to the frequent flyer program actually did upped the budget bottom line for Virgin Australia instead of destroying them.
I suppose that's because the travel demand is so huge that the two airlines are riding the wave now.

I think it's too early to make that call just yet.

They've had 1 quarter to the end of FY25 since the new method of earning status was implemented, and the new FF program criteria for status don't kick in till Oct 1. Probably get a deeper, more accurate insight in FY26 and FY27

 

[Layslow]

Any product or lounge announcements ?

 

[Saab34]

Nothing that really stands out in the analyst briefing, I only joined near the back half.
-FY28 is first -10
-Any -10 slots can be converted to -8s if certification is delayed. Won’t lose delivery slot in queue for example
-Not looking at converting any 8s to 10s.
-Transformational cost gains won’t be materially impacted should some deliveries from this FY slip into 26.
-More MAX options past FY28 do exist if -10 is delayed, can source more later on
-Buying vs Leasing will depend on market conditions at the time. Some favourable debt financing options coming out of Japan at the moment. They do what is simply best for shareholders when that time comes. Small hint was I think it will be split between both.
-Load Factor is around comfortable mark and only slight increases would be expected
-66% earnings in H1 higher compared to H2 due weather events, expecting to normalise this year 60/40~ pending any unexpected events.
-Short Haul International is only 10% of capacity.

Overall the coming years is pretty much what markis10 alluded to above. Steady sailing appears to be the new Virgin norm, it’s been about 20 years in between drinks you could say.

 

[HS-TQE]

On a related note in regards to VA/Bain's "Steady as She Goes" conservative approach, i think it's safe to say it's almost a certain thing that there will be no announcements from VA I'm regards to WSI operations (if any) for 2025.

If there's no subsequent announcements or sighting of any VA routes out of WSI (through aeroroutes) by the end of NW25/26, it'll be likely in that scenario that VA by then has decided to keep themselves out of WSI and remain consolidated to SYD..

 

[justinbrett]

Any product or lounge announcements ?

More $6 Pringles!

 

[Saab34]

On a related note in regards to VA/Bain's "Steady as She Goes" conservative approach, i think it's safe to say it's almost a certain thing that there will be no announcements from VA I'm regards to WSI operations (if any) for 2025.

If there's no subsequent announcements or sighting of any VA routes out of WSI (through aeroroutes) by the end of NW25/26, it'll be likely in that scenario that VA by then has decided to keep themselves out of WSI and remain consolidated to SYD..

I think that might be the right approach initially.

Gives them the opportunity to lean in to that market when it starts to pick up. They will be able to walk in and pick up a good share when it starts to become a bigger market, plus let the others test the market to work out what the market out west, wants, and when . I’m not sold on some of the numbers that WSI has put out, Mascot is not a dying species and will be around for as long as the earth turns.

Mascot needs to become more competitive, no questions about that, and T2 upgrades are a start, and I don’t think point that is lost on them.

 

[Lucass]

VA should begin looking at adding some widebodies to it's fleet over the next few years

 

[SeaWolf]

VA should begin looking at adding some widebodies to it's fleet over the next few years

Maybe wait and see how this wet leasing thing works out first.

 

[odysseus]

What's the initiative to "increase share of high value customers?"

The other two are readily apparent, but don't see anything to support the first one.

 

[justinbrett]

What's the initiative to "increase share of high value customers?"

The other two are readily apparent, but don't see anything to support the first one.

I read that as a polite way of saying “cull elites to the ones that make us a lot of money”.

 

[Layslow]

This is what you get when private equity runs an airline (yes not any more).... As a Virgin Flyer I can't tell you how disappointing today was. They need to make some investments and today they announced none

 

[muppet]

I found it quite shocking that VA’s CASK ex-fuel was over 11c compared to 6c for QF Group. Of course QF includes JQ and QLink but still. I assumed administration would have really stripped out costs.
…. unless I’m readying those two numbers in VA and QF presentations incorrectly.

 

[moa999]

What's the initiative to "increase share of high value customers?"

I think the new $ SC earn program of Lite /24, and Choice/ Flex /12 is clearly geared to this.

High value equals customers purchasing the higher priced / greater margin fares.

 

[anat0l]

I think it would be a supreme pessimist to think VA would be staring down a bleak or negative outcome for the end of FY25.

Outcomes not too surprising. The reputational damage to its rival might have helped a bit. I am interested to see how the fundamental changes to Velocity will pan out; it's too early to make any calls about how that's gone down, let alone on the bottom line.