VIRGIN BLUE HOLDINGS LIMITED (ASX:VBA) 2011 ANNUAL GENERAL MEETING ADDRESS BY THE CHAIRMAN NEIL CHATFIELD

The Board has been extremely supportive of this strategy. It has also found widespread favour 

among our stakeholders and the events of this year have demonstrated the foresight of our team in 

embarking on this program. 

The uncertain economic environment that we face today only serves to underscore the importance 

of diversifying our revenue and strengthening our position in the corporate and government market 

segments. 

The fact that the company managed to make such progress on the strategy this year despite a 

string of natural disasters and one-off events is testament to the strong leadership of John and his 

management team and the commitment and dedication of our staff. 

The changes over the past 12 months have been both extensive and exciting. Starting with 

securing a single strong brand for the entire group, we have redesigned the in-flight and ground 

guest experience, established a global network, significantly expanded our domestic regional 

network and integrated our airline operations. 

The response has been extraordinary. Our existing guests have welcomed the enhancements and 

one only needs to look at the number of new corporate accounts that we have already signed to 

gauge the success to date of the new business offering. 

Let me also mention just a few of the achievements for the company in the past year: 

· first, the 2011 Airline Passenger Experience Association Passenger Choice Awards, 

· second, the SkyTrax 2011 World Airline Awards, 

· and thirdly, our CEO John Borghetti was recently awarded the honour of Airline CEO of the 

Year for 2011 by the Centre for Aviation (CAPA). 

Furthermore, Virgin Australia is widely acknowledged as an important Australian company, this 

year achieving the Randstad Award for Australia’s most attractive employer, Australia’s fourth most 

respected company, Australia’s customer service organisation of the year and Australia’s most 

admired business. 

Our standing both domestically and overseas is something we can all be proud of. 

[Financial Performance] 

There’s no denying however that 2011 was a tough year financially and that the unprecedented 

series of events meant a disappointing headline result for investors resulting in an after tax loss of 

$67m. 

While John will comment on the results in more detail, I would like to reinforce that the company 

finished the year in a sound position. 

The company has a strong cash balance, it has secured funding for future aircraft purchases and 

the underlying business is solid. 

We have maintained a tight control on costs, and are heavily focused on future opportunities to 

drive revenue growth. Strong progress is already being reflected in the uplift in corporate and 

government revenue year on year. 

We are already seeing clear evidence of improved financial outcomes as a direct consequence of 

the Game Change Program, which shows the benefit of strategic initiatives designed to drive long 

term performance improvement. 

We are now better positioned to positively respond to changes in the operational environment in 

2012. 

[Sustainability] 

A key responsibility of the board is positioning the company to be sustainable for the long term, 

and safety is an important part of this. We are focused on maintaining the highest possible 

standards and continuously improving our practices. 

As part of this continuous improvement process, we have established a Board Safety and 

Operational Risk Review Committee that will directly oversee our safety performance. This will 

ensure safety remains the number one priority, from the day-to-day operations of our engineers 

and crew, to the strategic decisions of your management and board. 

We are also acutely aware of the importance of operational efficiency and our own impact on the 

environment and the community. 

In December 2010, the Directors formalised a vision for the airline to become a sustainability 

leader in the aviation industry and we have done considerable work this year on charting our 

current position and goals. 

We have a number of fuel and operational efficiency initiatives underway, including our investment 

in a six year $2.5 billion fleet renewal program which will see our average aircraft age reduce from 

4.9 years to 4.1 years by the end of the 2012 Financial Year. 

We have also led industry efforts towards establishing a sustainable aviation biofuel industry in 

Australia, setting a target of sourcing 5% of jet fuel used in Australia and New Zealand from 

biological sources by 2020 and partnering with a variety of different universities and companies to 

help commercialise individual biofuel projects. 

We are determined to invest in projects that meet stringent sustainability criteria and that support 

Australian jobs and innovation. 

We have a comprehensive program of community and charitable partnerships with a specific focus 

on helping Indigenous Australians and youth at risk. Not only do we provide support through 

donations and travel, but Virgin Australia team members are actively involved in these 

partnerships, including the Australian Indigenous Mentoring Experience, the Starlight Foundation 

and the Brisbane Youth Service. 

[Our People] 

I would like to spend a few moments talking about our people and culture. 

We believe the most important part of running a sustainable business is maintaining engaged and 

talented people. The team are the key to Virgin Australia’s reputation for excellent service and for 

our outstanding safety record. They have also played an important role in generating change in the 

business – they are the driving force behind Virgin Australia becoming the airline of choice in 

Australia. 

Having a diverse workforce brings a range of benefits for the company and we are committed to 

furthering our progress in this area. Women are expected to make up  more than 50% of our 

workforce in 2012 and Virgin Australia is a leader in this area, with 50% of our Group Executive 

being women. 

We have also implemented an Indigenous Employment Strategy which focuses on the recruitment 

and development of Aboriginal and Torres Trait Islanders. This strategy has been very successful, 

and we have increased our employment of Indigenous Australians tenfold since 2009. 

[Outlook] 

Clearly the environment remains challenging. It is difficult to foresee how the global economic and 

financial woes will be resolved in the near term, but there are some signs of optimism as US data 

strengthens and Europe, whilst highly volatile, appears to be focused on managing its issues. 

These issues weigh heavily on consumer sentiment, although we are fortunate to be in a region 

that is experiencing economic growth and development. 

In addition the competitive responses in our market are hard to anticipate. However, we are 

confident that the Game Change Program is the right course of action. In the first quarter of the 

current financial year, we are profitable and tracking ahead of budget and on last year. 

We anticipate an improvement in our full year results in Financial Year 2012 compared to last year, 

as the benefits of the Game Change Program deliver the expected financial outcomes. 

We thank you for your continued loyalty through this period of transformation and look forward to 

sharing the benefits of Virgin Australia’s strategy as we move forward.