iscover
Virgin Australia has posted a substantial half-yearly profit for the first half of FY2024 ahead of the exit of CEO Jayne Hrdlicka.
In an internal memo to Virgin staff obtained by Australian Aviation, Hrdlicka said the airline had made roughly $236 million in profit off the back of $2.8 billion in revenue in the six months to 31 December and had carried nearly 45 million passengers since it left administration.
The half-yearly profit is $100 million more than Virgin’s full-year profit of $129 million for FY23, and comes as Hrdlicka prepares to leave the company amid speculation that its owner, US private equity firm Bain Capital, pushed her out over dissatisfaction with her performance.
“This represents a group-level profit margin of 8.5 per cent for the half year versus 5 per cent last year first half. It reflects strong performance by all parts of the business – VARA, Velocity, Cargo, Domestic and Short Haul International,” said Hrdlicka in the internal email.
“While these results are very good, we are far from finished in lifting our performance across the board. We have a number of very important areas of focus over the coming year. If we can continue our strong execution focus on these initiatives while also running the airline well every day, we are in great shape for the future.
“The second half of the financial year will be tough with aggressive market pricing and strong capacity growth and we need to stay focussed on the execution of our plans.”
Hrdlicka also noted “significant efforts” to improve on-time performance after “what were clearly some challenging months in the lead-up to Christmas”, which saw Virgin’s reliability slump badly in BITRE results.
“Pleasingly, this effort led to significant improvement in the second half of January and February. The latest 28-day data shows us performing in line with pre-COVID norms, and I hope you all feel the benefit of that greater stability,” she said.
“And for our customers, we must remain hyper-focused on maintaining this level of performance. An enormous effort remains underway to ensure this happens.”
The TWU has used the news of Virgin’s half-yearly profits to urge Bain to settle a “fair deal” with pilots in ongoing enterprise bargaining.
TWU national secretary Michael Kaine said Virgin staff had “put in the hard yards” and made “huge sacrifices” to help save the airline during the pandemic.
“With a new CEO waiting in the wings and the potential for profits to keep climbing, it’s now time for owners Bain Capital to recommit to good, secure jobs for the workers who have delivered these strong financial results,” he said.
“Last year, workers came to Bain with a sensible, pragmatic plan to ensure the airline’s future. Bain’s listened and has made insourcing commitments, in stark contrast to the Qantas approach of illegal outsourcing and workforce fragmentation. It now must continue to prioritise decent work to ensure Virgin’s long-term success.
“After ground and cabin crew workers last year settled agreements ensuring fair pay increases and work-life balance, Bain must now urgently come forward with a decent offer for pilots.”
