25 August 2011

2011 Full Year ResultsJohn Borghetti, CEO

Sankar Narayan, CFO

2

Introduction

• Full year results in line with guidance provided in March

• Results influenced by unprecedented number of natural disasters and fuel price

• Market conditions reinforce rationale for Game Change Program

• Game Change Program ahead of schedule

- Project milestones ahead of schedule – product, fleet, network, brand and Velocity

- Positive feedback driving corporate market share wins

• Game Change Program transformation to continue in FY12 and to begin to deliver significant benefits

• Re-positioning will ensure business can operate in a high fuel cost environment and withstand unanticipated events

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Financial highlights

• Results within guidance

• Strong closing cash position of $731 million despite challenging operating environment

• EBIT loss of $18.4* million impacted by one-off events

• Year on year revenue growth in excess of 9%

• Group Yield and RASK is stable notwithstanding one off events affecting revenues

• Underlying CASK growth (excluding fuel) below inflation

• International network is EBIT positive at $22.4 million

• Statutory loss after tax $67.8 million

Note: * Excludes ineffective cash flow hedges and non-designated derivatives

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Group Profit and Loss summary

Year ended 30 June 2011 2011 $m

2010 $m

Revenue 3,271.0 2,981.8

Operating costs 3,248.9 2,874.7

Loss on sale PP&E 4.4 9.3

Unrealised foreign exchange losses 36.1 19.9

EBIT * (18.4) 77.9

Net interest costs 48.2 56.2

Underlying Profit / (Loss) before Tax * (66.6) 21.7

Ineffective cashflow hedges and non designated derivatives (28.2) 12.6

Income tax (expense) / benefit 27.0 (13.0)

Statutory Profit / (Loss) after Tax (67.8) 21.3

Note: * Excludes Ineffective cashflow hedges and non designated derivatives

5555

Event 2011**$m

Comment

Queensland natural disasters* 50.0 • Floods and Cyclone Yasi

Ash plume 7.0 • Impacted both Domestic and International network

Christchurch earthquakes 15.0 • Impact on trans-Tasman network

Restructuring and Navitaire costs 20.0 • Full settlement on Navitaire but timing difference on P&L recognition

• Network restructure and market exit costs

Total 92.0

One off events

Note: * Excludes leisure softening following Queensland natural disasters; ** Based on internal estimates

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Year ended 30 June 2011 2011$m

2010$m

Segment EBIT*

Domestic (40.8) 103.1

International 22.4 (25.2)

Group EBIT* (18.4) 77.9

Segment results

Note: * Excludes ineffective cashflow hedges and non-designated derivatives

7777

-

+9.1%

+2.6%

Variance%

Year ended 30 June 2011 2011 $m

2010 $m

Revenue 2,402.0 2,341.6

Operating Costs 2,442.8 2,238.5

Segment EBIT* (40.8) 103.1

-0.9%

+5.0%ASKs (m) 22,215.8 21,148.6

RASK (c) 9.31 9.39

Domestic Profit and Loss summary

Note: * Excludes ineffective cashflow hedges and non-designated derivatives

• RASK significantly impacted by one-off events

8888

-

+18.0%

+24.8%

Variance%

Year ended 30 June 2011 2011 $m

2010* $m

Revenue 953.8 764.0

Operating Costs 931.4 789.2

Segment EBIT* 22.4 (25.2)

+6.4%

+15.7%ASKs (m) 14,876.5 12,862.9

RASK (c) 5.78 5.43

International Profit and Loss summary

Note: * Excludes ineffective cashflow hedges and non-designated derivatives

9999

AUD millions 2011$m

2010 $m

Operating 213.5 369.2

Investing (285.4) (271.1)

Financing 3.0 241.9

Net cash inflow/(outflow) (68.9) 340.0

Exchange rate changes (14.5) (1.2)

Cash at 30 June* 731.3 814.7

Cashflow summary

Note: * A $70 million sale and leaseback of engineering spares was entered into post 30-June 2011

10101010$0.40$0.39NTA per share*

Year ended 30 June 2011 2011 $m

2010 $m

Cash and cash equivalents 731.3 814.7

Trade and other receivables 199.5 141.4

Property plant and equipment 2,754.9 2,753.9

Other assets 155.6 161.9

Total Assets 3,841.3 3,871.9

Trade and other payables 399.7 323.8

Interest bearing liabilities 1,639.9 1,787.8

Unearned revenue 699.9 616.9

Other liabilities 175.5 210.1

Total Liabilities 2,915.0 2,938.6

Net Assets 926.3 933.3

Balance sheet

Note: * Net tangible asset backing per ordinary share

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• Exit of Embraer E170 fleet by Jan 2012

Fleet – flexible and low fleet age (average 4.1 years in FY12)

June 2010 June 2011 Deliveries Retirement / lease return

June 2013

B737NG 62 63 25 (17) 71

B777-300ER 4 5 - - 5

E-170/190 21 23 1 (6) 18

A330-200 - 2 4 - 6

ATR - - 10 (2) 8

Total 87 93 40 (25) 108

Note: Figures up to end of FY12 – firm deliveries only and excludes additional options of rights to purchase

12121212

• No final dividend

• Committed financing for all fleet deliveries through to end of 2012

• Sale and leaseback program to further strengthen balance sheet

Capital and risk management

Hedging policy and positions AUD Jet Fuel

FY12

Operating requirements hedged 70%

Participation in favourable rate / price movements 76%

Effective rate AUD 104 per barrel

13

Review of Game Change strategic goals

No desire to be the biggest but want to be the domestic airline of choice

Diversify revenue

line

Create global

network

Access growth

markets

Maintain cost

advantage

Upgrade product & services

Invest our people

14

Target lower revenue volatility

Corporate and government segment is more resilient

Index

Note: Real 13 month moving average, indexed to March 2002; * High yield comprises business class and full economy, low yield comprises restricted economy and best discount Source: Bureau of Infrastructure, Transport and Regional Economics (BITRE)

Domestic airfares index(Mar 2002 – Aug 2011)

Low yield*

High yield*

120

100

80

60

0

Jan 10Jan 08Jan 06Jan 04Jan 02

120

100

80

60

0

Jan 10Jan 08Jan 06Jan 04Jan 02

Best discount

Business class

15

Progress to date: diversify revenue line

• Corporate and government customers make up 13% of our total revenue, up from 10% in FY10

- Represents 29% year-on-year growth

- High yield fare* revenue increased by 13% year-on-year

• Early benefits realised in H2 FY11

- High yield fare* revenue increased by over 25% pcp

- Corporate and government revenue increased by ~47% pcp

• Benefits flowing despite Game Change Program not fully implemented

Note: * High yield fares include flexi and premium fares

Reduced revenue volatility with higher yield and improving revenue mix

Corporate & government revenue growth (FY10-FY11)

High yield* fares revenue growth(FY10-FY11)

+29%

FY11FY10

+13%

FY11FY10

16

Corporate accounts update

• Signed 39 new corporate accounts in FY11 with minimum contract value of over $60m (annualised)

- New accounts include Accenture, Broadcast Australia, Google*, Parmalat, Reed Group, AFL and NBN Co

- Contracted 4 additional ASX50 companies, now total of 19 ASX50 companies have a travel account with Virgin Australia

• Of 50 managed corporate accounts renewed this year, all were at the same or higher share than previous contract

• More new accounts signed post 30 June 2011 – including Leighton and Spotless

Growing momentum in corporate and government revenue share

Note: * Account from the US

Corporate account wins(FY11)

21

18

Q4 FY11Q1 to Q3 FY11

17

Progress to date: create global network

Global network to over 400* destinations

• Completed global network ahead of schedule

- Implemented alliance with Etihad

- Implemented alliance with Air New Zealand, in July 2011

- Gained approval for alliance with Delta, implementation by end of 2011

- Agreed codeshare with Hawaiian Airlines

- Agreed alliance with Singapore Airlines (awaiting regulatory approval)

- Agreed codeshare with Virgin Atlantic to Hong Kong

• Increased participation in outbound and inbound international traffic

Note: * Unique codeshare and interline destinations

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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

AucklandHamilton

Wellington

Christchurch

DunedinQueenstown

Melbourne

Brisbane

Los Angeles

Cairns

Port MoresbyDenpasar

Honiara Port Vila

Nadi

Rarotonga

Apia

Nuku’alofa

Perth

Adelaide

Sydney

Chicago

Dallas

Las Vegas

Minneapolis

VancouverCalgary

Mexico City

Phoenix

PortlandEugeneMedfordRedding

Santa Rosa

Emirates

Note: * Does not include all destinations18

Virgin Australia network: as at 30 June 2010

19

Cairns

Gold Coast

Rotorua

Note: * Does not include all Delta destinations; ** Does not include all New Zealand domestic destinations^ Awaiting regulatory approval

AucklandHamilton

Wellington

Christchurch

DunedinQueenstown

Melbourne

Brisbane

Los Angeles

Cairns

Port MoresbyDenpasar

Honiara Port Vila

Nadi

Rarotonga

Apia

Nuku’alofa

Perth

Adelaide

Abu Dhabi

Sydney

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

DallasHonolulu

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

Kuala Lumpur

Langkawi

Singapore

Colombo

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

Virgin Australia network

19

20

Growing international capacity share

International capacity market share^(Jul 2004 – Apr 2011)

Virgin Australia global network 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

Jul 06

Jul 05

Jul 04

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 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

Forecast

Malaysia

JAL

21

Progress to date: access growth markets

Aligned our network to access growth markets with minimal capital expenditure

• Launched new services on important high yield domestic markets, with more services to follow

- Trans-continental: Coast to Coast services

- Canberra: Capital Connect services (from July 2011)

• Expanded regional network

- Implemented expanded Skywest codeshare in Western Australia

- Introducing ATR fleet to increase regional network reach: destinations include Canberra, Port Macquarie and Gladstone

22

Progress to date: maintain cost advantage

Continued focus on cost and improved efficiency and productivity

• Rationalised unprofitable routes (Johannesburg and domestic New Zealand)

• Built global network through alliances with minimal capital expenditure

• Optimised fleet operations and mix

• Integrated operations into one

• Introducing more fuel efficient ATRs

• Prudent capacity management – domestic capacity growth of ~5% in FY11, expected 4-6% in H1 FY12

23

Progress to date: upgrade product and service

Product and service enhancements are ahead of schedule

• Launched new uniforms

• Launched Airbus A330 product, including business class

• Introduced premium direct Lounge entry – Sydney domestic airport

• Unveiled new Boeing B737 business class and interior

• Re-launched Virgin Australia Lounge – Melbourne and Brisbane (July 2011)

• Upgraded Brisbane terminal

• Introduced priority boarding

• Introduced priority screening – Melbourne and Brisbane

24

Uniforms – Virgin Blue

25

Uniforms – Virgin Australia

26

Boeing 737 interior – Virgin Blue

27

Boeing 737 interior – Virgin Australia

28

Lounges – Virgin Blue

29

Lounges – Virgin Australia

30

Premium direct Lounge entry – Sydney

31

• Membership exceeds 2.5 million members – up 20% year on year

• We have re-built the program from the ground up

- Improved tier recognition and benefits, including new Platinum tier

- Significantly enlarged global program (600+ services*, 150+ lounges)

- Multiple retail, credit card, and everyday partners (over 380 partners)

- Improved Call Centre service

• Unique features that make a real difference

- Easier to get the flight that you want

- Fairer status earning

- Benefits that reward the whole family

Today – launch of new Virgin Australia Velocity Frequent Flyer Program

Note: * Flight services on which Velocity members can earn and burn frequent flyer points with airline partners, including Singapore Airlines alliance currently awaiting regulatory approval

32

Status match – limited time

33

Continued investment in our most important asset – our people

Virgin Australia staff underpin the success of Virgin Australia and the Game Change Program

• Stable industrial relations platform –collaborative approach to industrial relations

• Agreement with long haul international pilots and cabin crew

• Committed to creating jobs in Australia

• Continued investment and improvement in staff engagement and talent development

• Virgin Australia was named Australia’s most attractive employer*

Note: * 2011 Randstad Awards

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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 regulatory approval

35

Still to come…

Prior to 31 December 2011Hawaiian Airlines codeshare

Prior to 31 January 2012International operations re-branding

Early 2012Virgin Atlantic codeshare to Hong Kong

Prior to 31 December 2011Delta alliance implemented

Early 2012Coolangatta Lounge open

Prior to 31 October 2011Full trans-continental J class launch

Prior to 31 October 2011Turbo-prop fleet entry into service

Early 2012Singapore Airlines alliance implemented

Prior to 31 January 2012

Prior to 31 December 2011

Timeline

Network-wide J class launch

Mackay Lounge open

Activity

36

• Formulate Game Change strategic plan and commence implementation

Plan & implement

FY11

• Conclude roll out of Game Change strategic plan and begin benefits realisation from 2H FY12

Reposition

FY12

• Build upon strategic positioning in the global airline market from strengthened position in domestic market

Lead & leverage

FY13

Game Change Program – a three year journey

37

Outlook

• Expect an improvement in underlying financial performance in FY12 despite uncertain economic environment

• Unable to provide clear guidance for coming year

• Early indications of improving earnings in FY12

- Positive trading results in July and continued strengthening in the corporate and government markets

• Confident we have the right strategy to manage our response to changes in future market conditions and to ensure a stable and successful future for Virgin Australia

38