Airport charges and government fees are increasing at a significantly faster rate than inflation, Virgin Australia's boss has warned, echoing Qantas boss Vanessa Hudson's concerns a day before.
"Cost pressures persist across the industry with costs growing above inflation in several areas of the aviation supply chain, including airport charges and aircraft maintenance," CEO Dave Emerson told an earnings briefing.
"The broader aviation industry must remain vigilant on costs so aviation doesn't become unaffordable for Australians."
Airport charges increased 14 per cent in the year to December 2025, compared to 3.8 per cent headline inflation, as monopoly airports invested significant cash into capital works, chief financial officer Race Strauss said.
"We support investment in airports," he said.
"We need to make sure that it creates value for our customers, but there is a lot of capital investment planned across the entire airport network, so I would expect that to be an ongoing cost."
Virgin is back-paying tax after exiting administration more than five years ago and returning to the stock exchange.
The carrier's bottom-line interim net profit - the first reported since it re-listed in June - fell almost 28 per cent to $341 million.
The first-half decline was due to a 30 per cent effective tax rate applied after exiting administration in late 2020.
Maintenance costs also weighed on the figures, including a significant one-off increase as Virgin returned some of its fleet to the skies, and at the industry level due to aircraft manufacturing delays.
"We do have some global supply chain issues, obviously, with the delay in the new aircraft that is pushing all airlines around the world to use older aircraft, which creates more maintenance demand (with) no change in supply, pushing up prices," Mr Strauss said.
The airline's underlying earnings - before interest and tax - for the first half of 2025/26 rose almost 12 per cent to $490 million, driven by revenue growth of 9.3 per cent in the six months ended December.
It booked revenue per available seat kilometre growth of 6.4 per cent, which normalised after the massive growth of 2024's second half, when discount carrier Rex entered voluntary administration.
Virgin transported more than 11 million passengers across Australia and to international destinations during the half - a 3.4 per cent improvement on the same period in 2025.
Virgin is forecasting continued growth in underlying earnings before interest and tax in the second half of the financial year.
Virgin shares were 0.3 per cent lower to $3.14 in afternoon trading.
