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Chairman’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

6

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

7

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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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