Virgin Australia showed its strongest half-year result in 11 years, with an underlying profit before tax of 37% to A $ 112 million ($ 79.5 million).
Sales in the airline group for the six months to December 2018 increased by 10% to A $ 3.07 billion, due to higher revenues and tax factors in its domestic network, as well as the expansion of its Asian long-haul network.
Net profit after tax increased to A $ 73.8 million, a sharp increase compared to A $ 4.4 million in the previous corresponding period. This included A $ 24.6 million of restructuring costs largely associated with the fleet simplification program.
"An important contribution to these figures is the performance of our domestic company, which maintains its strong position in the market," said chief executive John Borghetti during the airline's earnings call.
The main domestic activities reported a gain before interest and tax (EBIT) of A $ 177 million, an increase of 27%. RASK improved by 7.1% while the yield rose 6.3%, attributing the airline to "a disciplined increase in flown capacity".
The international network generated an EBIT loss of A $ 12 million, more than three times higher than a loss of A $ 2.7 million in the previous corresponding period, despite a sales increase of 15% to A $ 666 million. Virgin noted that the network was hit by a headwind of A $ 32.3 million in fuel and currency, while there were also start-up costs associated with the Sydney-Hong Kong launch.
Budget unit Tigerair Australia reported a modest improvement in the EBIT loss to A $ 8 million, with the result being accelerated by the accelerated depreciation of the decrease of the fleet of the company. However, RASK increased by 13% and gave 14.2%, which according to Virgin is reflected network optimization.
The cash and cash equivalents at December 31 were A $ 1.25 billion, compared to A $ 1.42 billion at the beginning of the period, largely as a result of a A $ 266 repayment.
In its outlook, the courier says that, based on forward bookings, it expects its turnover to grow by at least 7% in the third quarter, but refused to give even more guidance as a result of "uncertain market conditions".
Borghetti responded to the call that Australia "is in a very good state in the interior", pointing out that the uncertainties lay largely around oil prices and other broader geopolitical factors.