Virgin Australia has narrowed its losses on cost cutting and a better domestic market

Sir Richard Branson and Virgin Australia CEO John Borghetti. Paul Kane/Getty Images

Virgin Australia has posted a loss of $47.8 million million for the first half, reducing red ink on the back of cost cutting, cheaper fuel and a better domestic market.

The statutory loss after tax is an improvement on a loss of $74.3 million for the same period in 2014. The underlying profit before tax was $10.2 million.

Total revenue increased 6% to $2.377 billion and cost cutting has reached a cumulative $312.6 million.

Qantas, the market leader is is expected to hit profit of between $300 million and $350 million in the six months to the end of December 2014.

CEO John Borghetti says the result has been driven primarily by continued progress in driving yield growth in the domestic market and the disciplined execution of our five-year $1 billion cost reduction program.

“The group has succeeded in driving domestic yield growth despite ongoing subdued consumer sentiment which continues to impact overall demand,” he says.

He expects an improved performance in the second half of the 2015 financial year.

“However, due to current market conditions, we are not able to provide more specific guidance,” Borghetti says.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.