The group reported its strongest statutory profit after tax in six years, $62.5 million, an improvement of $110.3 million on first half financial year 2015.
Virgin Australia CEO John Borghetti says revenue per seat delivered 'very strong growth'.
"Yield growth was also significant, the result of attracting more corporate and government travellers during the half," he says.
"For Virgin Australia International, RASK growth continued, despite a $19.2 million impact due to volcanic activity in Bali.
"The business remains on track to deliver a profit by the end of the 2017 financial year."
Velocity, Virgin's frequent flyer program, experienced an average daily join rate of almost 2600 members over the period to see its membership grow to 5.7 million and revenue and underlying EBIT margin improve.
Virgin has sustained its lead in domestic on time performance for 15 consecutive months over its 'major competitor'.
Further, Virgin has commanded an ability to charge 9.1 per cent more for the average airfare as it attracts more corporate and government business.
This goes hand in hand with Virgin maintaining a strict discipline on costs, decreasing cost per available seat kilometre (CASK) by 1.5 per cent on the prior corresponding period.
Virgin's international division, impacted by volcanic activity in Bali, experienced a loss again. International underlying EBIT loss was $30.8 million, but this was an improvement on the $39.5 million loss a year earlier.
"Based on current market conditions, all fundamental business metrics are in place for the group to report a profit for the 2016 financial year and deliver a return on invested capital in line with its cost of capital," says Borghetti.
"However, due to current market conditions, we are not able to provide more specific guidance at this time."
Get our daily business news
Sign up to our free email news updates.