Virgin Australia is just months away from profit, helped by increased cost-cutting and an end to the price war with Qantas.
Its domestic business hit earnings of $111.1 million for the full year, an improvement of $210.1 million.
And Australia’s second biggest airline says it’s on track for further margin improvement and profitability for the whole group in the current 2016 financial year.
“We are seeing strong results from the transformation of Virgin Australia Domestic,” says CEO John Borghetti.
Revenue for the domestic business increased by 4.8% on the 2014 financial year on capacity growth of 1.3%.
Virgin says it will hit its target of gaining 30% of revenue from the corporate and government segment by June 2017.
Overall, the airline reported an underlying loss before tax of $49 million for the 2015 financial year, an improvement of $162.7 million. The statutory loss after tax was $93.8 million, an improvement of $260.0 million.
Here are the numbers:
“I’m pleased to confirm that based on current market conditions, all fundamental business metrics are on track for the group to return to profitability,” Borghetti.
The airline is ahead of its target of $1 billion of cumulative cost savings by the end of financial year 2017 and is now expected to hit $1.2 billion, excluding fuel pricing.
The fall in oil prices led to a benefit of about $60 million.