Virgin Australia (ASX: VAH) saw its underlying earnings hit $3,071 million during the first half of FY19, an all-time record for the airline, and the strongest result since the 2008 financial year.
The company says this result was driven by strong performance in the company's domestic airline business, supported by a stable market, and buoyed by effective cost control.
Underlying profit before tax was up 37.1 per cent to $112.3 million despite $88.2 million fuel and foreign exchange headwinds.
Group CEO and managing director John Borghetti says the result has strengthened the financial foundation of the business.
"This is the group's strongest half year underlying result since the 2008 financial year and represents our improving profitability after a significant period of investment and repositioning," says Borghetti.
"We've made solid progress in strengthening the financial foundations of our business. Today's results continue to demonstrate the on-going success of our cost transformation program which is improving cash flow and reducing financial leverage to deliver sustainable profitability."
The tables have suddenly turned here for Borghetti who recently announced his successor, Paul Scurrah, after ten years of leading Virgin.
Over the last few years Virgin has struggled to turn a profit, recording a $653.3 million loss after tax in 2018, a $185.8 million loss in 2017, and a $224.7 million loss in 2016.
In 2018 Virgin also failed in an attempt to become a private company because none of its combination of majority shareholders wanted to buy the others out.
Borghetti says Scurrah is inheriting a company in good shape.
"While we are not immune from global economic changes, we have prudent hedging strategies and the right cost and efficiency programs in place to help mitigate against fuel price increases," says Borghetti.
Tigerair, Virgin's budget airline offering, reported significant improvements in its EBITDA of 135.3 per cent despite $12.7 million in fuel and foreign exchange headwinds.
Shares in Virgin Australia are up 7.69 per cent to $0.21 per share at 10.17am AEDT.
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