Virgin Australia announced on Monday its second consecutive annual profit, alongside a 6.8% increase in year-on-year revenue, bolstering its financial position as the airline gears up for an eventual initial public offering (IPO).
Qatar Airways recently revealed plans to acquire a 25% stake in Virgin Australia, marking a significant investment as the airline prepares for its return to public ownership. This comes after Virgin Australia was purchased by U.S. private equity firm Bain Capital following its collapse into voluntary administration in 2020. The carrier, a key rival to Qantas Airways, returned to profit last year for the first time in 11 years.
CEO Jayne Hrdlicka expressed confidence in the airline’s future: “Continued improvement in profitability means we are well-positioned to deliver great value and choice to Australian travellers. It is essential to our ability to re-invest in our business and customer experience, and vigorously compete with our major competitor.” Hrdlicka also noted that the past year had been challenging for the aviation industry.
Though Virgin Australia did not disclose its after-tax profits, it reported underlying earnings before interest and tax of A$519 million ($350 million) for the financial year ending June 30, an 18.2% increase from the previous year. Chief Financial Officer Race Strauss cited cost inflation as a significant challenge.
Qantas, meanwhile, reported a 16% drop in annual underlying earnings before tax in August, attributed to lower fares and higher spending on customer service.