Virgin Australia Swings To H1 Net Profit

Virgin Australia swung to a half-year profit as it cut costs and attracted more higher-spending corporate passengers, and forecast a return to profitability for the full year.

The airline posted a net profit of AUD$45.7 million (USD$32.4 million) for the six months to December 31, up from a net loss of AUSD$53.1 million in the prior first half.

"All fundamental business metrics are in place for the group to report a profit for the 2016 financial year," Virgin chief executive John Borghetti said in a statement, a forecast of improvement over two previous years of net losses.

Virgin and Qantas have been curbing spending and refraining from fare cuts to rebuild earnings after a price war saw them rack up billions of dollars of collective losses.

Virgin has also been building up its loyalty scheme, which grew pre-tax earnings to AUD$70.8 million for the half, from AUD$45.2 million the previous year.

Budget airline Tigerair, which Virgin bought from Singapore-listed Tiger Airways in 2014, delivered pre-tax earnings of AUD$13.9 million, up from AUD$1.6 million, its best half-yearly result since commencing operations, Virgin said.

Virgin said it cut "fuel and oil" expenses 8.6 percent to AUD$561.1 million in the half year, while revenue rose 11.8 percent to AUD$2.7 billion.

The company did not declare an interim dividend.