Annual Financial Results12 months
ended 30 September 2005
Brett GodfreyManaging Director16 November 2005
1
Financial Highlights
-Nil25.0 centsDividend per share
10.1 cents
$105.2
$148.4
$379.5
$1,755.7
2005 $ m
-40.9%17.1 centsEarnings Per Share
-33.2%$157.4Net Profit After Tax
-33.8%$224.3Profit Before Tax
-11.2%$427.2EBITDAR
+ 14.6%$1,532.6Revenue
% Increase / Decrease
2004 $ m12 months to 30
September
2
Operating Highlights
- 3.0%6.22 cents6.03 centsCASK – excluding fuel
+ 1.2%10.5110.64Yield – scheduled revenue
7.84 cents
48.8
76.8%
20.4 billion
15.7 billion
13.4 million
2005
+4.9%7.47 centsCASK – including fuel
+ 12.4%44.3Average Aircraft
- 2.1 pts78.9%Load Factor - revenue
+ 16.6%17.5 billionASKs
+ 13.8%13.8 billionRPKs
+ 13.6%11.8 millionPassengers carried
%
Increase/Decrease
2004 12 months to 30 September
3
Virgin Blue – the last 12 monthsA
ug 3
0 20
00
Jan
05
Feb
05
Mar
05
Apr
05
May
05
Jun
05
Jul 0
5
Aug
05
Sep
05
Oct
05
Nov
05
Dec
05
Up to
50
fligh
ts p
er d
ay S
YD
/ MEL
Blue
Plu
s fa
res
50th
Airc
raft
IFE
/ Int
erna
tiona
l Fle
et
Mor
e ki
osks
New A
PI fo
r Cor
p ac
coun
ts
VS C
odes
hare
Even
qui
cker
che
ck in
with
web
che
ck
Anno
unce
new
ADL
loun
ge
Velo
city
-FF
PVe
loci
ty –
Cred
it Ca
rd
LCC NWC (New World Carrier)
$138
.1 m
illion
Net
Pro
fit A
fter T
ax
Com
men
ce c
onst
ruct
ion
of
hang
ar fa
cility
in B
risba
ne
OAG L
ow C
ost C
arrie
r of t
he Y
ear
Skyb
oard
–bi
gges
t mob
ile b
illbo
ard
in A
ustra
lia
4
Group Strategy
Improve quality and reduce volatility of revenue streams
Maintain superior operational performance
Product development and new business opportunities
Keep driving cost control culture
5
Positioning ourselves to improve revenue streams
COST
YIELD
QANTAS DOMESTIC
JETSTAR
RYANAIR
AIR ASIA
VIRGIN BLUE 2000
VIRGIN BLUE TODAY
Legacy
Dinosaurs
Low Cost Carrier
New World Carrier
SABENA
PAN AM
6
Revenue Improving yield environment
Yield (Scheduled Revenue)
13.05
11.77
10.4010.65
8.00
9.00
10.00
11.00
12.00
13.00
14.00
15.00
FY01/02 FY02/03 FY03/04 FY04/050%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Yield ASK Growth
7
Improving Revenue
Focus on improving quality of Revenue – increase yield and reduce volatility
Increase penetration of business market
Elevate market/brand penetration
Product improvement
Interline and ancillary revenue – new revenue sources, higher margins
Branding and marketing targeted spend
8
Operational Performance - OTP
70
75
80
85
90
95
Mar-05 Apr-05 May-05 Jun-05 Jul-05 Aug-05
OTP
Per
cent
age
JetstarQantasVirgin Blue
Source: DOTARS
Average:
Jetstar 84.8%
Qantas 83.9%
Virgin Blue 90.4%
9
Product Improvement Supports Move Upmarket into Business Market
Frequency via trunk routes
Blue Room
Web Check-in
Kiosks
Blue Plus Fares
Corporate branding
API
Others
Cost neutral or better
Delayed launch
• rollout still 2006
Will provide the only live individual seat-back IFE in Australia
• Available on all flights
• Leapfrogs competitors IFE product
Live2Air
“Velocity”
Launched yesterday
Survey evidence showed lack of program biggest barrier to corporate guests flying Virgin Blue
Any seat, no fee, protected
Entering a monopoly market
Highly competitive
Loyalty Program
10
Other Revenue Streams – Higher Margins Lower Volatility
APINew API technology allows Virgin Blue to Codeshare with any international carrier• Estimated to account for up
to 15% of Qantas traffic which has been locked up until now
Focus on major, quality carriers for volume of traffic and upmarket associationFirst deal being road tested with VSMore planned for 2006Provides interface to Corporate Travel Buyers
Ancillary revenue
On board productBlue Holidays dynamic packagingCar hireHotelsInsurance
11
Non-Flying Revenue – Area for Growth
13.6%
7.2%4.9% 4.3%
2.0%0%
5%
10%
15%
20%
Ryanair Easyjet VirginBlue
Jetblue Southwest
Ancillary Revenue as Percentage of Total Revenue
12
Controllable Costs Continue to be Driven Downwards
Average cost per barrel of Jet Fuel has increased more than 76%
As a result, CASK rose in 2H05
Price impact (ASK adjusted) in 2004/5 was $115 million
Non-fuel costs well under control
Driven by scale and productivity initiatives
Still lowest cost airline in Australia
6.48 6.00 6.08 5.98
1.251.26 1.63 1.97
0
1
2
3
4
5
6
7
8
9
10
1H04 2H04 1H05 2H05
Other Fuel
Cost per ASK (cents)
7.737.26 7.71 7.95
13
Fleet StrategyContinue to operate one of the youngest fleets in the world
Fleet profile in next 12 months
4 new 737-800 to be added
2 leased 737-800 to be returned (one in FY06 and one in FY07)
ASK growth in FY06 under 2.5%
14
Capital Management
Full year dividend of 25 cents per share
Policy going forward to pay annual dividend subject to capital management strategy
No commitment to underwrite future dividends.
15
Outlook2004/05 Tough Year
Fuel price increase had impact of $115 million before taxHighly competitive environment, especially with pressure on yieldsConsolidation and focus on product development broadened our appeal.
2005/06 …Fuel not expected to return to previous levels (FY04 –US$35bbl)Market capacity more closely aligned to demand.Corporate initiatives expected to take root.Further cost initiatives expected to be driven through
16
Thank You