The cost of restructuring at Virgin Australia kept the airline underwater in the final quarter of 2016.
The underlying loss before tax of $21.9 million for the three months was an improvement of $15 million on the corresponding period the year before.
The result includes the impact of previously announced charges, mainly restructuring.
For the full year, the underlying profit before tax was $41 million, an improvement of $90.1 million on 2015.
However, the statutory loss after tax for the 12 months was $224.7 million.
A short time ago, Virgin Shares were up 2.3% to $0.220.
In February, Virgin posted a $62.5 million half year profit compared to a loss of $47.8 million the year before. The result, an improvement of $110.3 million, was the strongest since the first half of 2010.
The return to improved profitability for Australia’s second biggest airline comes on the back of an end to the price war with Qantas, bringing better returns for each seat sold, plus cost cutting and lower fuel prices as crude oil falls on global markets.
Virgin is targeting savings of $300 million a year by the end of the 2019 financial year.
The existing efficiency initiatives will have delivered $1.2 billion in cumulative cost savings by the end of the 2017 financial year.
“The group improved its underlying performance, passenger numbers and load factors in the fourth quarter in a challenging operating environment,” says CEO John Borghetti.
Like Qantas, Virgin has been reducing capacity in response to weaker demand for domestic travel. Virgin says domestic capacity was cut by 2% in the fourth quarter.
In June Virgin announced an equity raising of $852 million through a 1 for 1 entitlement offer to shareholders at $0.21 a share.
Virgin will report its full year results on August 5.