Virgin Australia Holdings Limited · ASX:VGN

Virgin Australia — Virgin Blue Holdings — 9M to June 2006 Earnings Presentation

17 slides from Virgin Australia's earnings presentation, Aug 23, 2006

  1. Slide 1: Financial Results for the nine months ended 30 June 2006

    Financial Results for the nine months ended 30 June 2006 Brett Godfrey - Managing Director 23 August 2006

  2. Slide 2: 2006 Environment of Unrelenting Pressure

    2006 “Environment of Unrelenting Pressure” Industry and Economy „ Jet fuel prices „ Security „ Cost bases rising „ Airlines worldwide reporting reduced margins „ Rising interest rates, petrol, banana prices 1

  3. Slide 3: Key Performance Indicators

    Key Performance Indicators 1. Capacity by ASK’s up 3.9%, RPK’s up 6.1% 2. RASK up 4.7% - load factor up 1.9pts, yield up 2.6% 3. Fuel cost up $60m (production adjusted), up 23% 4. Underlying cost base down 2% 5. International operations (Pacific Blue and Polynesian Blue) positive performers 6. Profi

  4. Slide 4: Financial Highlights

    Financial Highlights % 2006 2005 Increase / 9 months to 30 June $ millions $ millions Decrease Revenue 1,392 1,283 + 8.5 % EBITDAR 291 281 + 3.6 % EBIT 133 110 + 20.9 % Profit Before Tax 123 106 + 16.0 % Net Profit After Tax 84 75 + 12.0 % Earnings Per Share 8.1 ¢ 7.2 ¢ + 12.5 % 3

  5. Slide 5: Operating Highlights

    Operating Highlights % Increase/ 9 months to 30 June 2006 2005 Decrease Passengers carried 10.5 m 9.8 m + 7.1 % RPKs 12.1 bn 11.4 bn + 6.1 % ASKs 15.7 bn 15.1 bn + 3.9 % Average Aircraft 51.1 48.9 + 4.5 % Load Factor – passenger 77.9% 76.0% + 1.9 pts Yield – scheduled revenue 10.96 ¢ 10.68 ¢ + 2.6 %

  6. Slide 6: Net profit after Tax - Reconciliation

    $000's 25,000 50,000 75,000 100,000 125,000 150,000 0 N PA T Ju N n '0 on 5 Fu el C AS K R ed uc tio n R AS K Im pr ov em en t N et P ro du ct io n G ai n Ve lo ci ty C os t s Fu el Pr ic e In cr ea Net profit after Tax - Reconciliation se N PA T Ju n '0 6 5

  7. Slide 7: Airline Strategy Update

    Airline Strategy Update „ Improve quality and reduce volatility of revenue streams ƒ Product Development ƒ Ancillary Revenue „ Maintain superior operational performance „ Product development and new business opportunities „ Keep driving cost control culture 6

  8. Slide 8: Key Initiatives

    Key Initiatives „ Velocity Program – furthering value of program, adding partners - meeting expectations „ The Lounge - relaunch at major airports - Syd, Mel, Bne and now Adl - Take-up exceeding targets „ Flexible Fares for business travellers, Web Check - Kiosks and Web Check in nearing 50% - Launc

  9. Slide 9: New Initiatives Update

    New Initiatives Update „ Code share & Interlining – developing partnerships „ Long Haul „ Live TV 8

  10. Slide 10: Flying Revenue - Yield environment

    Flying Revenue Yield environment – scheduled revenue 15 200% 13.05 13 150% 11.77 10.65 10.96 11 10.40 100% 9 50% 7 0% 5 -50% FY02 FY03 FY04 FY05 9m06 * Yield VB ASK Growth Market ASK Growth 9

  11. Slide 11: Flying Revenue - cont. Revenue Load Factor

    Flying Revenue – cont. Revenue Load Factor 100.0% 200% 90.0% 150% 82.8% 77.9% 78.9% 76.8% 77.0% 80.0% 100% 70.0% 50% 60.0% 0% 50.0% -50% FY02 FY03 FY04 FY05 9m06 * LoadFactor VB ASK Growth Market ASK Growth 10

  12. Slide 12: The On Time Airline - On Time Departures

    The On Time Airline - Virgin Blue Has bettered Qantas Group’s OTP Every Month Since 2004 100 Virgin Blue 20 Month Average 89.4% On Time Departures (%) 95 90 85 Qantas 20 Month Average 85.5% 80 75 70 5 4 5 5 5 6 5 5 4 5 5 6 5 5 6 6 5 6 5 6 l- 0 v-0 v-0 g-0 t -0 r-0 r-0 c-0 c-0 p-0 n-0 n-0 b-0 b-0 r-0

  13. Slide 13: Controllable Costs Continue to be Driven Downwards

    Controllable Costs Continue to be Driven Downwards 9 „ Continuing org-wide Focus 8 1.25 1.19 „ CASK 2.0% reduction non-fuel 7 1.25 1.63 1.97 2.10 1.26 controllable costs 6 „ Fly Smart fuel program 5 „ Procurement controls 4 7.28 7.53 „ People cost control 3 6.48 6.00 6.09 5.98 5.92 „ Productivity ga

  14. Slide 14: Fleet Strategy

    Fleet Strategy 30 June 2005 2006 2007 737 – 700’s 22 22 22 737 – 800’s 27 29 31 49 51 53 Leased 32 31 30 Owned 17 20 23 49 51 53 „ ASK growth in FY07 planned to be 2.8% - flexibility being considered ƒ Net 2 737-800 additions in FY07 „ 9 x 737NG’s on order for FY08/09/10 – current thought replacemen

  15. Slide 15: Capital Management

    Capital Management „ New Board is currently reviewing dividend policy with regard to capital management strategy. Resolved no dividend will be paid in respect of the 9mths to 30 June 2006. „ Capital expenditure forecast for FY07 is $130m „ Gearing, including operating leased aircraft, was 59.7% for

  16. Slide 16: Outlook

    Outlook „ VB now well placed, broadened scope, cost base controlled „ Comfortable with strategic direction „ New corporate traveller initiatives attracting new business „ Further domestic product enhancements being delivered „ Corporate sector – expecting tighter focus on travel budgets „ Remain cau

  17. Slide 17: Thank you Q&As

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Virgin Blue Holdings — 9M to June 2006 Earnings Presentation on 6ix