#1For personal use only H1 FY20 Results Presentation 26 February 2020 This annoucement was authorised for release by the Virgin Australia Holdings Limited Board Virgin australia group#21H20 highlights FINANCIAL PERFORMANCE (All Pre-AASB16 unless otherwise stated) Record 1H20 revenue of $3,116.3 million and 2.5 per cent RASK growth Underlying Profit Before Tax of $14.5 million Statutory Loss After Tax of $88.6 million (post-AASB 16) Cash balance of $1,107.6 million For personal use only UPDATE ON STRATEGIC AND COST MANAGEMENT INITIATIVES Group network capacity reduction of 3% in 2H20; and 5% Group capacity reduction in FY21 to meet market conditions Acceleration of Tigerair's transition program to all Boeing 737 fleet. Nine A320 aircraft to exit Tigerair's fleet by October 2020, including the two A320 aircraft announced in November Total of 12 aircraft exits announced since November 2019, including three Fokker 100 aircraft New organisational structure and executive leadership team; workplace reduction program and supplier review on track Full ownership of Velocity Frequent Flyer business Exit of all Hong Kong flying by March 2020 CONTINUED FOCUS ON CUSTOMER EXPERIENCE Strong customer satisfaction rating, with highest first half Net Promoter Score (NPS) score in four years Best performance of a major airline for on time departures and arrivals in 1H20 and the major airline least likely to cancel flights Launch of Brisbane-Tokyo flights in March 2020 Virgin Australia Group has implemented AASB 16 Leases from 1 July 2019 using the modified retrospective approach. Under this approach, prior year comparative information has not been restated. Year on year changes and commentary have been based on pre-AASB 16 information ("pre-AASB 16") to allow for comparison. 1H20 comparison for the Group between pre and post AASB 16 is provided on slide 16 for operating performance and slide 17 for cashflow. 1H20 financials exclude AASB 16 to enable prior year comparison unless otherwise stated. This page contains Non-Statutory measures which are defined on slide 23 Virgin Australia Group results H1 FY20 | 2 Virgin australia group#3Group results Guest numbers continuing to increase and Revenue is at record levels VAH Group (pre-AASB 16) 1H20 1H19 Change KEY METRICS Guests (m) ASKS (m) 13.3 13.1 +2.1% 25,627 25,795 (0.7%) Strong guest growth OPERATING PERFORMANCE Total Revenue ($m) 3,116.3 3,069.5 +1.5% EBITDAR ($m) 513.2 560.2 (8.4%) UPBT ($m) 14.5 111.9 (87.0%) Fuel cost up $48.2 million reflecting strong hedging gains in PCP, Enterprise Agreement and airport charges increased significantly above CPI Underlying Profit before Tax of $24.5 million, including $10 million, impact of AASB 16 Statutory Loss Before Tax of $88.6 million, including impact of AASB 16 RASK up across all segments Profit (Loss) Before Tax ($m) (99.9) 87.7 (213.9%) • Increase in Adjusted Net Debt reflects Velocity acquisition RASK (c.) 12.1 11.8 +2.5% Post-AASB 16 adjusted net debt $4,247.2 million CASHFLOW & BALANCE SHEET . Post-AASB 16 financial leverage is 5.2 times Cash ($m) 1,107.6 1,251.5 ☐ Adjusted Net Debt ($m) 5,050.4 3,935.2 Cash Generated from Operating Activities ($m) 5.8 276.4 (11.5%) (28.3%) (97.9%) Net Liabilities ($1,599.6) million reflecting adoption of AASB 16 and Velocity acquisition Financial Leverage (times) 6.4 4.1 (57.1%) Notes: Virgin Australia Group has implemented AASB 16 Leases from 1 July 2019 using the modified retrospective approach. Under this approach, prior year comparative information has not been restated. Year on year changes and commentary have been based on pre-AASB 16 information ("pre-AASB 16") to allow for comparison. 1H20 comparison for the Group between pre and post AASB 16 is provided on slide 16 for operating performance and slide 17 for cashflow. 1H20 financials exclude AASB 16 to enable prior year comparison unless otherwise stated. From 1 July 2019 the Group has classified finance income received and finance costs paid as financing cash flows rather than operating cash flows as these classifications provide more relevant and reliable information in relation to the effects of these transactions. The comparative has been reclassified to be consistent with the current period presentation but not restated. This page contains Non-Statutory measures which are defined on slide 23. Following modification of accounting presentation for unrealised Foreign Exchange, 1H19 numbers have been restated accordingly. Virgin australia group Virgin Australia Group results H1 FY20 | 3#4Group Underlying Profit performance Group performance impacted by rise in fuel, airport, Enterprise Agreement, and depreciation costs, and soft market conditions Virgin australia group For personal use only $50m AU$100m 111.9 $150m $200m 46.8 (48.2) (13.5) (11.6) ■■■(4.5)■ (30.5) 2.9 (20.7) 24.5 (18.1) 14.5 10.0 $0m 1H19 UPBT Group Revenue Fuel and Oil1 Airport charges, navigation and station operations² Aircraft Rentals EA employee costs 2,3 CPI4 Other expenses² Depreciation and Amortisation Interest 1H20 UPBT excl AASB 16 AASB 16 1H20 UPBT incl AASB 16 Notes: 1) Fuel and oil impact includes $8.2m Time Value of Money on FX related to fuel in addition to appendix 4d 2) Adjusted for CPI 3) EA employee costs include all payroll costs as well as Hotac, Per Diems and Allowances 4) Company estimate including wages and other inflation Virgin Australia Group has implemented AASB 16 Leases from 1 July 2019 using the modified retrospective approach. Under this approach, prior year comparative information has not been restated. Year on year changes and commentary have been based on pre-AASB 16 information ("pre-AASB 16") to allow for comparison. 1H20 comparison for the Group between pre and post AASB 16 is provided on slide 16 for operating performance and slide 17 for cashflow. 1H20 financials exclude AASB 16 to enable prior year comparison unless otherwise stated. Following modification of accounting presentation for unrealised Foreign Exchange, 1H19 numbers have been restated accordingly. This page contains Non-Statutory measures which are defined on slide 23. Virgin Australia Group results H1 FY20 | 4#5Segment performance - domestic airlines RASK growth achieved by both brands. Group domestic capacity reduced in line with strategic realignment and soft demand environment Virgin Australia Domestic Total Revenue ($m) For personal use EBIT ($m) S Guests (m) ASKS (m) RASK (c.) Virgin australia group 1H20 1H19 Change Domestic capacity reduction responding to subdued domestic market conditions 2,114.2 2,082.3 +1.5% 112.9 178.1 (36.6%) Fuel cost increase of $23.2 million 9.57 9.39 +1.9% EA Labour costs up 2.7%. Non - EA costs flat, with benefits of workforce reduction program expected in 2H20 13,762 13,837 (0.5%) Airport terminal fees increase at 2.5 times the rate of CPI¹ 15.4 15.0 +2.1% Tigerair Australia 1H20 1H19 Change Total Revenue ($m) 305.4 302.6 +0.9% EBIT improvement driven by ongoing fleet simplification EBIT ($m) Guests (m) ASKS (m) RASK (c.) 2.0 (6.6) +130.3% 2.20 2.22 (0.7%) Fuel cost increase of $4.3 million, offset by effective cost control including reduced maintenance costs in line with fleet simplification 2,961 2,950 +0.4% Network optimisation continuing with capacity adjustments announced for 2H20 10.3 10.3 +0.6% Notes: 1) Company estimate including wages and other inflation Virgin Australia Group has implemented AASB 16 Leases from 1 July 2019 using the modified retrospective approach. Under this approach, prior year comparative information has not been restated. Year on year changes and commentary have been based on pre-AASB 16 information ("pre-AASB 16") to allow for comparison. 1H20 Segment financials excl AASB 16 to enable prior year comparison. This page contains Non-Statutory measures which are defined on slide 23. Following modification of accounting presentation for unrealised Foreign Exchange, 1H19 numbers have been restated accordingly. Virgin Australia Group results H1 FY20 | 5#6Segment performance - Virgin Australia International and Velocity International performance affected by higher costs and challenging market conditions Virgin Australia International Total Revenue ($m) EBIT ($m) Guests (m) ASKS (m) RASK (c.) For personal use only Virgin australia group 1H20 1H19 Change 686.4 666.1 +3.0% Revenue growth driven by Trans Tasman post end of Air New Zealand alliance (48.9) (15.2) (221.7%) 1.56 1.45 +7.3% Withdrawal from Hong Kong operations in March 2020 due to challenging conditions, EBIT loss of $130 million since commencement 8,904 9,007 (1.1%) Fuel up $20.3 million and product investment on Short Haul International offsetting revenue growth 7.7 7.4 +4.2% Strong EBIT performance driven by ongoing member revenue growth Velocity Frequent Flyer 1H20 1H19 Change Revenue growth driven by airline partners and financial services Total Revenue ($m) EBIT ($m) Members (m) 215.4 208.9 +3.1% • Margin improvement reflects focused cost management and increased participation 68.9 59.0 +16.8% 10.1 9.5 +6.3% Velocity acquisition completed with focus on increased returns per member and broader partner base Investment in data and digital integration driving deeper member personalisation and responsiveness to members Virgin Australia Group has implemented AASB 16 Leases from 1 July 2019 using the modified retrospective approach. Under this approach, prior year comparative information has not been restated. Year on year changes and commentary have been based on pre-AASB 16 information ("pre-AASB 16") to allow for comparison. 1H20 Segment financials excl AASB 16 to enable prior year comparison. This page contains Non-Statutory measures which are defined on slide 23. Following modification of accounting presentation for unrealised Foreign Exchange, 1H19 numbers have been restated accordingly. Virgin Australia Group results H1 FY20 | 6#7Fleet simplification, network and capacity review Continued discipline with network and fleet to reduce costs and adapt to softer market conditions and coronavirus impact FLEET KEY CHANGES Tigerair transition to all Boeing 737-800NG aircraft by October 2020 Transition program will provide a single fleet type across the Group's full service and low-cost carrier operations, delivering cost savings and improved operating performance - Widebody fleet review – significant cost savings available from next generation aircraft NETWORK AND CAPACITY - KEY CHANGES Ongoing optimisation of domestic network, consolidation of existing route frequencies and withdrawal of Tigerair routes Group capacity reduction of 3% in 2H20 including short term tactical capacity reduction to respond to current environment; and up to 5% reduction in FY21 Tigerair Australia to exit five routes: Sydney - Adelaide / Cairns / Coffs Harbour; Melbourne - Coffs Harbour; Hobart - Gold Coast Withdrawal of Hong Kong by March 2020, in response to market conditions and coronavirus impact Launch Brisbane - Tokyo March 2020 australa Virgin australia E Virgin australia group VH Virgin Australia Group results H1 FY20 | 7#8Velocity Frequent Flyer acquisition Reclaiming full ownership of frequent flyer program to drive significant benefits for the Group MEMBERSHIP GROWTH SEGMENT REVENUE AND INCOME For personal use only 1H18 1H19 1H20 10.1m 9.5m 8.6m 1H18 $191m 1H19 1H20 +6% CAGR $215m $209m 1H18 1H19 1H20 +11% CAGR $69m $59m $56m This page contains Non-Statutory measures which are defined on slide 23 Group will now retain 100% of cashflows and equity distributions from Velocity business Incremental revenue synergy opportunities through improved loyalty engagement Increased wallet share through enhanced data and analytics initiatives • Group integration simplifies business and enables cost savings Virgin australia group Membership base continues to grow, standing at more than 10 million 2019 Awards: Program of the Year; Best Redemption Ability; Best Customer Service; Best Elite Program and Best Promotion at the Freddie Awards in the Middle East and Asia / Oceania category Virgin Australia Group results H1 FY20 | 8#9Organisational restructure, workforce reduction and supplier review Strategic transformation and cost initiatives remain on track, with financial benefits expected to materialise Virgin australia group ORGANISATIONAL RESTRUCTURE + WORKFORCE REDUCTION For personal use only SUPPLIER REVIEW New structure introducing Group accountability and reducing duplication Workforce reduction program to remove 750 roles Targeting annualised cost savings of $75 million On track for 400 roles exited by 31 March 2020, with 750 by year end Significant pipeline of activity underway to optimise supply chain and renegotiate arrangements with key suppliers Long-term legacy contracts containing unfavourable terms proving challenging Group is reviewing agreements with catering and engineering providers and aviation technology providers to realise better commercial outcomes • Significant savings being realised in the areas of fuel, accommodation and marketing services On track for annualised savings of $30 million by 31 March 2020, and $50 million by year end Virgin Australia Group results H1 FY20 | 9#10Improvements in customer experience Strong performance across customer satisfaction and OTP ratings, with the Group continuing to strive for excellence across all aspects of the customer experience Virgin australia group For personal use only, Achieved Virgin Australia's highest first half Net Promoter Score (NPS) since FY16 Strong OTP performance for 1H20, with Virgin Australia the leading major airline for on time departures and arrivals, and the major airline least likely to cancel a flight for 1H20 Implemented real time, daily customer satisfaction feedback across Virgin Australia's post-flight and post-contact centre calls Reduced onboard announcements to minimise disruption to guests and create a calm, quiet atmosphere Launched Nervous Flyers program, providing access to expert resources and meditation content onboard, and alerting our crew so they can keep an eye out for guests who may need extra support Continued focus on improving the sustainability of our inflight and Lounge products, which has resulted in the increased use of bio-based and recycled materials Virgin Australia Group results H1 FY20 | 10#11Impact of coronavirus / Outlook Coronavirus expected to negatively impact Group earnings by $50-75 million in 2H20 DOMESTIC DEMAND IMPACT INTERNATIONAL DEMAND IMPACT Potential $50-55 million impact on Group domestic earnings in 2H20, with Tigerair $15 million and Virgin Australia Domestic $35-40 million Impact of international Chinese inbound cancellations Domestic demand impacted by bushfire and low GDP growth Potential $10-20 million impact across Hong Kong, Trans Tasman and Japan Hong Kong ceases service from March 2020 For personal use only. DOMESTIC MITIGATION STRATEGIES INTERNATIONAL MITIGATION STRATEGIES Virgin Australia Group capacity reduction of 3% in 2H20 Fast-tracking exit of Tigerair A320s to facilitate all-B737 fleet by October 2020, with capacity reductions to continue into FY21 Reduced short term capacity into significantly impacted domestic markets, such as Cairns Exit of Hong Kong market from March 2020 Capacity reductions on the Trans Tasman Continued focus on cost-out initiatives Continued focus on cost-out initiatives Virgin Australia Group results H1 FY20 | 11 Virgin australia group#12For personal use only Supplementary Slides Virgin australia group#13Reconciliation of UPBT to Statutory result Costs associated with: workforce reduction program (redundancies), fleet simplification, one-off Velocity acquisition costs, and write-offs associated with property, plant and equipment no longer in use totalling $113.1 million $50m Virgia australia group For personal use only, $0m ($50m) 24.5 ($100m) 1H20 Underlying Profit Before Tax (12.1) (28.8) Redundancy costs Fleet simplification and other transformation costs (26.8) (31.6) (8.8) (2.0) (3.0) (88.6) Velocity Acquisition Write off of property, costs and associated plant and equipment employee payments Accelerated Depreciation Unrealised ineffectiviness Foreign Exchange 1H20 Statutory Loss after Tax Virgin Australia Group has implemented AASB 16 Leases from 1 July 2019 using the modified retrospective approach. Under this approach, prior year comparative information has not been restated. Year on year changes and commentary have been based on pre-AASB 16 information ("pre-AASB 16") to allow for comparison. This page contains Non- Statutory measures which are defined on slide 23 Virgin Australia Group results H1 FY20| 13#14Statutory Financial Summary (post AASB 16) Group Financial Summary ($m) Revenue and income Statutory profit / (loss) after tax Add back: Income tax expense Statutory profit/(loss) before tax Add back: For personal use only 1H20 1H19 Change 3,118.2 3,071.0 47.2 (88.6) 73.8 (162.4) 0.0 13.9 (13.9) (88.6) 87.7 (176.3) Business and capital restructure and transaction costs (67.7) (26.1) (41.6) . Write off of and disposal of property, plant and equipment Accelerated depreciation (31.6) 1.5 (33.1) Key components: $26.8 million of one-off costs relating to Velocity acquisition . (8.8) 0.0 (8.8) Non-cash write off of property, plant and equipment (108.1) (24.6) (83.5) . $40.9 million transformation costs including fleet simplification and onerous contracts Restructuring sub-total Add back: Foreign Exchange Ineffectiveness on cash flow hedges Underlying profit before tax (post AASB 16) AASB16 impact on underlying profit before tax Underlying profit before tax (pre AASB 16) (3.0) 0.4 (3.4) (2.0) 0.0 (2.0) 24.5 111.9 (87.4) (10.0) 0.0 (10.0) 14.5 111.9 (97.4) Virgin Australia Group has implemented AASB 16 Leases from 1 July 2019 using the modified retrospective approach. Under this approach, prior year comparative information has not been restated. This page contains Non-Statutory measures which are defined on slide 23. Virgin Australia Group results H1 FY20 | 14 Virgin australia group#15Statutory Cashflow Statement (post AASB 16) For personal use only Cash Flow Statement ($m) Cash generated from operating activities Cash payments for business restructuring expenses Net cash from operating activities Net cash used in investing activities Net cash from (used in) financing activities 1H20 1H19 Change 261.5 276.4 (14.9) (62.4) (13.4) (49.0) 199.1 263.0 (63.9) . (122.7) (263.6) 140.9 (708.5) (198.7) (509.8) Net increase in cash and cash equivalents incl. impact of FX Cash and cash equivalents (632.4) (164.0) (468.4) 1,107.6 1,251.5 (143.9) Investing activities includes $130 million proceeds on aircraft disposal driven by sale and lease back transaction Financing includes cash paid for Velocity acquisition as the entity was already consolidated Cash balance >$1 billion Virgin Australia Group has implemented AASB 16 Leases from 1 July 2019 using the modified retrospective approach. Under this approach, prior year comparative information has not been restated. This page contains Non-Statutory measures which are defined on slide 23. Virgin Australia Group results H1 FY20❘ 15 Virgia australia group#16AASB 16 Impact on Profit and Loss account For personal use only Profit and Loss ($m) Total Revenue Operating Costs EBITDAR Aircraft Rentals EBITDA Pre-AASB 16 AASB16 Post-AASB 16 3,116.3 1.9 3,118.2 (2,603.1) 17.5 (2,585.6) 513.2 19.4 532.6 (202.3) 196.5 (5.8) • 310.9 215.9 526.8 Depreciation & Amortisation (198.8) (109.7) (308.5) EBIT 112.1 106.2 218.3 Net Interest UPBT (97.6) (96.2) (193.8) 14.5 10.0 24.5 Statutory Profit/ (Loss) After Tax (99.9) 11.3 (88.6) Operating lease expenses replaced by interest and depreciation charges Earlier recognition of cost of end of lease return provisions arising from the new standard Virgin Australia Group has implemented AASB 16 Leases from 1 July 2019 using the modified retrospective approach. Under this approach, prior year comparative information has not been restated. Year on year changes and commentary have been based on pre-AASB 16 information ("pre-AASB 16") to allow for comparison.. Virgin Australia Group results H1 FY20| 16 Virgin australia group#17AASB 16 impact on Cashflow Statement For personaligny Cash Flow ($m) Cash generated from operating activities Cash payments for business restructuring expenses Net cash from operating activities Net cash used in investing activities Net cash from (used in) financing activities Pre-AASB16 AASSB16 Post- AASB16 5.8 255.7 261.5 (62.4) 0.0 (62.4) . (56.6) 255.7 199.1 . Operating lease payments removed and replaced by interest charge and principal repayment Inclusion of interest paid on leases in financing activities (137.4) 14.7 (122.7) • (438.1) (270.4) (708.5) Principal repayment of leases included in financing activities No net change in cashflows Net increase in cash and cash equivalents incl. impact of FX (632.4) 0.0 (632.4) Cash and cash equivalents 1,107.6 0.0 1,107.6 Virgin Australia Group has implemented AASB 16 Leases from 1 July 2019 using the modified retrospective approach. Under this approach, prior year comparative information has not been restated. Year on year changes and commentary have been based on pre-AASB 16 information ("pre-AASB 16") to allow for comparison.. Virgia australia group Virgin Australia Group results H1 FY20❘ 17#18Net Asset Reconciliation including AASB 16 and Velocity acquisition Virgin Australia Group adopted AASB 16 with effect 1 July 2019 using the modified retrospective adoption approach and therefore there is no restatement of prior period. There has Obeen an impact to retained earnings Aircraft leases denominated in USD make up 88% of the opening lease liability balance $405 million retained earnings impact due to FX movements on lease liabilities between lease inception and 1 July 2019 Debt funded acquisition of Velocity has reduced net assets Virgin australia group For personal use only. ($2,000m) ($1,500m) ($1,000m) ($500m) ($0m) ($500m) ($1,000m) ($1,500m) ($2,000m) Pre AASB 16 Post AASB 16 618.9 1,190.0 1,273.2 (405.5) (235.3) (512.9) (119.8) (737.8) (861.8) (1,599.6) Jun 19 Right of Use Net Assets Asset Lease Liability Aircraft FX on Aircraft Lease Liability Lease Other Maintenance Provisions Other Adjustments 01 Jul 19 Net Assets Post AASB 16 Velocity Acquisition & Ordinary Activities 31 Dec 19 Net Assets Virgin Australia Group results H1 FY20| 18#19Statutory Balance Sheet summary (post AASB 16) For personal use only Balance Sheet and Liquidity ($m) Cash and cash equivalents Other current assets Property, plant & equipment Other non-current assets Total assets 1H20 FY19 Change 1,107.6 1,740.0 (632.4) 377.3 425.3 4,323.3 3,202.1 (48.0) 1,121.2 . Creation of Right of Use Assets as part of AASB 16 implementation 974.2 1,100.8 (126.6) • 6,782.4 Current interest-bearing liabilities 542.2 6,468.2 314.2 771.9 229.7 Non-current interest-bearing liabilities 4,812.4 2,256.9 Interest-bearing liabilities 5,354.6 Other liabilities Total liabilities Total equity 3,027.4 3,028.8 2,820.5 8,382.0 (1,599.6) 618.9 (2,555.5) (2,325.8) (206.9) 5,849.3 (2,532.7) (2,218.5) • . Impact of AASB 16 and debt funded Velocity acquisition impacting interest bearing liabilities Retained earnings as represents transaction with existing owners FY19 unrestricted cash balance was higher ahead of the US 144A note repayment Unrestricted cash balance 900.3 1,330.3 (430.0) Virgin Australia Group has implemented AASB 16 Leases from 1 July 2019 using the modified retrospective approach. Under this approach, prior year comparative information has not been restated. This page contains Non-Statutory measures which are defined on slide 23. Virgin Australia Group results H1 FY20❘ 19 Virgin australia group#20Hedging and foreign exchange Operating Exposures Fuel (Brent) FX (AUD/USD) For personal use only Remaining FY20 DEBT PORTFOLIO BASE CURRENCY MIX H1 FY18 DEBT PORTFOLIO BASE CURRENCY MIX H1 FY19 81% 19% 72% 100% 100% FY21 DEBT PORTFOLIO BASE CURRENCY MIX H1 FY20 2% 28% 45% AUD Debt USD Debt JPY Debt 53% 75% Virgin australia group 75% . . • Significant fuel and FX hedging in place for FY20 and FY21 with 33% participation to further falls in fuel prices for remainder of FY20 and 86% participation for FY21 Continued to de-risk balance sheet with AUD funding and cross currency swaps. Significant cash reserves are also held in USD to further mitigate risk Debt currency mix is now predominantly AUD following repayment of US$400 million Nov 19 bond and refinancing of additional USD obligations to AUD Revaluation of AASB16 US$ Lease liability will create non-cash P&L noise with movements in AUD/USD (approx. $30 million P&L per 1 cent move). Lease cash flows continue to be managed as operating exposure Virgin Australia Group results H1 FY20| 20#21Group Treasury and Funding For personal use only CAPITAL MANAGEMENT Strategic review being accelerated to improve free cash flow generation and improve leverage over time Generate free cash flow over time to target BB/Ba band credit rating No significant debt maturity until FY22 (Oct 21 US$350 million bond) No scheduled aircraft deliveries until FY22 1H20 leverage (pre AASB 16) impacted by lower EBITDAR vs PCP and debt funded Velocity acquisition Adjusted Financial Leverage 1H15 - 1H20 7.1 6.2 4.9 4.5 6.4 III..l 4.1 1H15 1H16 1H17 1H18 1H19 FUNDING STRATEGY/HIGHLIGHTS Maintain access to diverse sources of funding from debt capital markets, commercial bank markets and aircraft operating lease markets Debt Maturity FY21 - FY27 Group results 1,400 1,200 Unsecured funding - US$425 million 144A bond and inaugural A$325 million listed retail note to fund acquisition of remaining 35% of Velocity 1,000 800 Continue to refinance aircraft in AUD where possible $225 million Velocity facility extended to FY23 Committed and undrawn facilities of ~A$166 million at Dec 19 This page contains Non-Statutory measures which are defined on slide 23.. Following modification of accounting treatment for unrealised Foreign Exchange, historical numbers have been restated accordingly. 600 400 200 1H20 AUD Notes Velocity Facility USD 144A Notes Aircraft Financing Aircraft Leases FY21 FY22 FY23 FY24 FY25 FY26 FY27 Virgin Australia Group results H1 FY20| 21 Virgin australia group#22Operating fleet personal use only GROUP OPERATING FLEET¹ As at 31 Dec 2019 B737-700/800 E190 A330 B777 ATR72-500/600 19 79 Leased 39 6 6 As at 31 Dec 2019 Owned 40 As at 30 June 2019 80 08 As at 30 June 2018 82 82 6 6 5 1 4 5 5 8 8 8 8 Virgin Australia Airlines fleet 98 54 44 99 101 F100 13 13 14 14 A320 (Charter & Tigerair) 15 14 1 15 15 B737-800 (Tigerair) Virgin Australia Group 1) Excludes aircraft that have been removed from operational service 6 1 5 5 3 132 69 63 133 133 Virgin australia group Virgin Australia Group results H1 FY20❘ 22#23Disclaimers, definitions and ASIC guidance Disclaimer The non-IFRS information has not been audited or reviewed by KPMG. This document has not been audited or reviewed by KPMG; however, IFRS data has been derived from the Virgin Australia Holdings Limited Interim Financial Report for the half-year ended 31 December 2019 that has been reviewed by KPMG. Definitions Underlying Profit Before Tax or UPBT: is a non-statutory measure that represents statutory profit/(loss) before tax excluding the impact of Business and Capital Restructure and Transaction Costs (as defined below); gain on disposal of assets; write off of property, plant and equipment; onerous contract expenses; net foreign exchange gain/(loss); and unrealised ineffectiveness on cash flow hedges (as defined below). This is a measure used by Management and Board of Virgin Australia Holdings Limited (VAH) to assess the financial performance of VAH Underlying: Earnings Before Interest, Tax, Depreciation, Amortisation and Aircraft Rentals or EBITDAR: is a non-statutory measure per Note 2 of the VAH Interim Financial Report. It is used by Management and VAH's Board as a measure to assess the financial performance of VAH and its individual segments. It is defined as Underlying Profit Before Tax (as defined above) excluding the impact of depreciation, amortisation, aircraft rentals and net finance costs. Underlying Earnings Before Interest & Tax or EBIT: is a non-statutory measure per Note 2 of the VAH Interim Financial Report. It is used by Management and VAH's Board as a measure to assess the financial performance of VAH and its individual segments. It is defined as Underlying Profit/(Loss) Before Tax (as defined above) excluding the impact of net finance costs. Business and Capital Restructure and Transaction Costs (or Transformation): is a non-statutory measure that includes business and capital restructure and transaction costs. Unrealised ineffectiveness on Cash Flow Hedges: is a statutory measure as reported in Note 2 of the VAH Interim Financial Report. Underlying: Earnings Before Interest, Tax, Depreciation, Amortisation and Aircraft Rentals or EBITDAR: is a non-statutory measure per Note 2 of the VAH Interim Financial Report for the half-year ended 31 December 2018. It is used by Management and VAH's Board as a measure to assess the financial performance of VAH and its individual segments. It is defined as Underlying Profit Before Tax (as defined above) excluding the impact of depreciation, amortisation, aircraft rentals and net finance costs. RASK: is a non-statutory measure derived from segment revenue divided by Available Seat Kilometres (defined below) of the regular passenger transport businesses. personal use only CASK: is a non-statutory measure and is defined as regular passenger transport costs associated with the Virgin Australia Domestic, Virgin Australia International and Tigerair Australia segments including fuel divided by ASK (as defined below) Yield: is a non-statutory measure derived from segment revenue divided by Revenue Passenger Kilometres (defined below) of the regular passenger transport business. Load Factor: is a non-statutory measure of the capacity utilisation of the Group's regular passenger transport business derived from number of revenue generating guests carried divided by available seats. ASK or Available Seat Kilometre: is a non-statutory measure derived from total number of seats available for passengers multiplied by the number of kilometres flown on Virgin Australia or Tigerair Australia operated flights. RPK or Revenue Passenger Kilometre: is a non-statutory measure derived from number of paying passengers multiplied by the number of kilometres flown on Virgin Australia or Tigerair Australia operated flights. Financial Leverage: is a non-statutory measure and is defined as the ratio of Adjusted Net Debt (as defined below) to EBITDAR. This is calculated excluding the impact of AASB16. Adjusted Net Debt: is a non-statutory measure derived from Net Debt (as defined below) adding 7 times annual aircraft rentals. This is calculated excluding the impact of AASB16. Net Debt: is a non-statutory measure derived from interest-bearing liabilities less cash and cash equivalents. This is calculated excluding the impact of AASB16. Forward Looking Statements This document contains certain forward looking statements. Forward looking statements can generally be identified by the use of words such as 'project', 'foresee', 'plan', 'expect', 'aim', 'potential', 'goal', 'target', 'intend', 'anticipate', 'believe', 'estimate', 'may', 'could', 'should', 'will' or similar expressions. Indications of, and guidance on, future earnings and financial position and performance are also forward looking statements. Forward looking statements, opinions and estimates provided in this document involve a number of risks, assumptions and contingencies, many of which are beyond the Virgin Australia Group's control and which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. It is believed that the expectations reflected in these forward looking statements, opinions and estimates are reasonable, but there can be no assurance that actual outcomes will not differ materially from these statements. Such forward looking statements, opinions and estimates are provided as a general guide only, should not be relied on as an indication or guarantee of future performance and speak only as of the date of this announcement. You should not place undue reliance on forward looking statements. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness, likelihood of achievement or reasonableness of any of the information, forward looking statements, opinions and estimates contained in this document. To the maximum extent permitted by law, none of the Virgin Australia Group, its directors, employees or agents, nor any other person accepts any liability for any loss arising from the use of the information contained in this document. Except as required by law and ASX Listing Rules, the Virgin Australia Group has no obligation to update publicly or otherwise revise any forward looking statement, opinion or estimate as a result of new information, future events or other factors. Nothing contained in this presentation constitutes investment, legal, tax or other advice. You should make your own assessment and take independent professional advice in relation to the information contained in this document and any action taken on the basis of that information. ASIC guidance th December 2011, ASIC issued Regulatory Guide 230. In order to comply with this Guide, Virgin Australia Holdings Limited is required to make a clear statement about whether information disclosed in documents other than the Virgin Australia Holdings Limited Interim Financial Report for the half year ended 31 December 2019 has been audited or reviewed in accordance with Australian Auditing Standards. The non-IFRS information has not been audited or reviewed by KPMG. This presentation has not been audited or reviewed by KPMG; however, IFRS data has been derived from the Virgin Australia Holdings Limited Interim Financial Report for the half- year ended 31 December 2019 which has been reviewed by KPMG. 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