for personal use only · cathay pacific, japan airlines, lan airlines, and malaysia airlines –...
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Chairman’s address
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CEO’s address
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Aligned capacity and network for profitability
• Restructured the network to eliminate non-profitable routes
• Rationalised unprofitable routes (Johannesburg and domestic New Zealand)
• Consolidated long-haul international operations to two strategic hubs
• Optimised fleet operations and mix
- Introduced Airbus A330s
- Exited Embraer E170s
- Introduced ATR72s and entered new regional marketsFor
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Virgin Australia
Virgin Atlantic
Virgin America
Delta*
Alaska*
Bangkok Airways
South African Airways
Johannesburg
New YorkBoston
San Francisco
Orlando
Fort Lauderdale
Washington
SeattleLondon
To / from LON
To / from USToronto
Cincinnati
Atlanta
Tampa
OttawaDetroit
New Orleans
Raleigh
ColumbusIndianapolis
Miami
Philadelphia
Houston
Memphis
Salt Lake CityReno
Baltimore
Cape Town
Port Elizabeth
Durban
East London
Phuket Krabi
Koh Samui
LampangChiang Mai
Utapao
Bangkok
Chicago
Dallas
Las Vegas
Minneapolis
VancouverCalgary
Mexico City
Phoenix
PortlandEugeneMedfordRedding
Santa Rosa
Emirates
Note: * Does not include all destinations
Virgin Australia network: as at 30 June 2010
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AucklandHamilton
Wellington
Christchurch
DunedinQueenstown
Melbourne
Brisbane
Los Angeles
Cairns
Port MoresbyDenpasar
Honiara Port Vila
Nadi
Rarotonga
Apia
Nuku’alofa
Perth
Adelaide
SydneyFor
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6Note: * Does not include all Delta destinations; ** Does not include all New Zealand domestic destinations^ Awaiting final regulatory approval
Honolulu
Cincinnati
Atlanta
Tampa
Ottawa
Detroit
New Orleans
Raleigh
ColumbusIndianapolis
Kona
Lihue Kahului
Miami
Philadelphia
Houston
Memphis
Minneapolis
Salt Lake City
Sacramento
Cancun
GuadalajaraPuerto Vallarta
San Diego
Baltimore
Phoenix
Virgin Australia
Virgin Atlantic
Virgin America
Etihad
Air NZ**
Delta*
Singapore / Silk^
Hawaiian
Virgin Australia network
AucklandHamilton
Wellington
Christchurch
DunedinQueenstown
Melbourne
Brisbane
Los Angeles
Cairns
Port MoresbyDenpasar
Honiara Port Vila
Nadi
Rarotonga
Apia
Nuku’alofa
Perth
Adelaide
Abu Dhabi
Sydney
Kuala Lumpur
LangkawiColombo
Kathmandu
Osaka
TokyoBeijing
HyderabadMumbai
Thiruvananthapuram
Penang
Kota KinabaluBrunei
Kuching
Phnom PenhSiem Reap
Balikpapan
Davao
Ho Chi Minh City
Lombok
Manado
MedanPekanbaru
Nagoya
Jakarta
PhuketYangon
Ahmedabad
Male
KochiCoimbatore
Bengaluru
Kolkata
Delhi
Chennai
Kunming XiamenTaipei
ChengduChongqing
Hong Kong
Fukuoka
Seoul
ManilaCebu
Shanghai
ShenzenGuangzhou
SurabayaSolo City
Palembang
BangkokChiang Mai
Dhaka
Da NangHanoi
Cairns
Gold Coast
Rotorua
Singapore
Athens
Brussels
Paris
Moscow
Dublin
Frankfurt
Geneva Munich
MilanIstanbul
Larnaca
London
ManchesterMinsk
Casablanca
Cairo
Cape Town
Abu Dhabi
Muscat
Tehran
Kuwait
Doha
RiyadhJeddah
BahrainDamman
AmmanBeirut
Damascus
Khartoum
Almaty
To / from AUH
To / from US
Astana
Karachi
Lahore
Islamabad
Peshawar
Chicago
Alexandria
Baghdad
Erbil
Johannesburg
New York
Boston
San Francisco
Orlando
Fort Lauderdale
Washington
SeattleLondon
To / from LON
To / from USToronto
Las Vegas
DallasHong Kong
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Growing international capacity share
International capacity market share^(Jul 2004 – Nov 2011)
Virgin Australia capacity share in and out of Australia: ~26% by July 2012*
0%
10%
20%
30%
40%
Jul 12
Jul 11
Jul 10
Jul 09
Jul 08
Jul 07
Oneworld**
Virgin Australia network*
Note: * Includes V Australia, Pacific Blue, Polynesian Blue, Etihad, Air New Zealand, Delta Airlines, Singapore Airlines, Virgin Atlantic, and Hawaiian Airlines; ** Includes Qantas, British Airways, Cathay Pacific, Japan Airlines, LAN Airlines, and Malaysia Airlines – other Oneworld carriers do not have capacity in or out of Australia; *** Awaiting final regulatory approval; ^ Market share based on seat capacity, and forecast based on latest April 2011 dataSource: Bureau of Infrastructure, Transport and Regional Economics
Delta
Etihad
Air NZ
Singapore***; Virgin Atlantic;
Hawaiian
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Diversified revenue line
• Early benefits flowing even before full implementation of Game Change Program
• Signed 39 new corporate accounts in FY11
- New accounts include Accenture, AFL, Broadcast Australia, Hilton Worldwide, Linfox, NBN Co, Parmalat, Reed Group, Rio Tinto, Spotless and Veolia
• Corporate and government customers made up 13% of our total FY11 revenue, up from 10%
- H2 FY11 Corporate and government revenue increased by ~47% pcp
• Successful business class trans-continental launch with thousands of passengers carried in the first month (October)
• Successful introduction of ATR, operations between Brisbane and Gladstone had high loads of around 80% and forward bookings to all ports continue to look strong
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Our people underpin the strength of our business
• Service delivery from our people still our key differentiator
• Improved management capability
• Continued investment and improvement in staff engagement and talent development
• Strong communication and continuous engagement with workforce – a collaborative approach to industrial relations
• Committed to creating jobs in Australia
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Game Change Program scorecard
Invest in our team
Enhance in-flight and on-the-ground guest experience
Develop comprehensive global virtual network*
Integrate and align the airline operations and brands
Maintain cost advantage and efficiencies
Achieve a more balanced revenue mix, and improved yields and return
FY11 FY12 FY13
Early benefits being realised
Ahead of schedule
Ahead of schedule
% completed
Continuous
Note: * Singapore Airlines alliance awaiting final regulatory approval
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The year ahead
• Drive revenue growth
• Consolidate Game Change Program initiatives and introduce more
• Continue to invest in our people
• Maintain disciplined cost and capacity management with flexibility to meet demand
• Invest in Australia and support tourism into our country
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Improving total shareholder return
Total shareholder return performance indices(1 Jul 2010 – 18 Nov 2011)
VBA
QAN
ASX-200
160
140
120
100
80
0
180
Note: * Gross dividend, data from 1 July 2010 to 18 November 2011Source: Bloomberg
Jul 10
Jan 11
Jul 11
Index Total return*
VBA + 27%
QAN - 24%
ASX-200 + 8%
Oct 10
Apr 11
Oct 11
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Outlook
• Underlying PBT for the first quarter of FY12 was higher than the corresponding period last year, despite an increase in fuel costs
• While we continue to expect an improvement in underlying performance for FY12, we are unable to provide clear guidance due to the uncertain economic environment
• We are building significant momentum in this strategy and we have now laid the foundations for future growth
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Formal business
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