Virgin Australia has confirmed it will remain an ASX-listed company for now as the airline delivered its best half-year financial results in a decade.
Chairman Elizabeth Bryan said there is no current intention to privatise the group following the board's discussions with Virgin Australia's five major shareholders.
However Virgin Australia has offered to buy out small shareholders left with unmarketable stakes, with 91 per cent of the airline's stock now held by Etihad Airways, Singapore Airlines, the Virgin Group and China's HNA Aviation Group and Nanshan Group.
Virgin Australia made an underlying pre-tax profit of $102.5 million in the six months to December 31, more than doubling its result in the previous corresponding half.
Chief executive John Borghetti said the company expects its underlying performance in the second half of the financial year to be stronger than the second half of 2016/17.
First-half revenue lifted six per cent to $2.8 billion thanks to passenger growth in both its domestic and international businesses.
The ongoing simplification of the domestic fleet saw capacity better match demand, which helped Virgin Australia's domestic business deliver pre-tax earnings growth of 91 per cent.
Pre-tax earnings in the smaller international business rose 75 per cent, despite volcanic disruptions in Bali and the costs associated with an expansion to Hong Kong.
Low-cost subsidiary Tigerair Australia made a pre-tax earnings loss of $6.7 million, as the removal of its services to Bali in early 2017 left it with surplus aircraft that were temporarily used on domestic routes.
Those aircraft are now no longer in use and Virgin Australia expects Tigerair Australia's performance to improve.
The group made a net loss of $10.3 million in the first half, due to costs from its fleet simplification and restructuring, an improvement on a $36.1 million loss a year ago.
Virgin Australia expects to spend up to $5 million on its buyback of shares from investors with stakes worth under $500, which it has deemed unsellable.
"This facility will give those shareholders the ability to sell their shares at an appropriate price and in a convenient, cost-effective manner," Ms Bryan said.
Virgin Australia shares were down 1.75 cents at 24.25 cents at 1420 AEDT.
VIRGIN AUSTRALIA'S RECORD UNDERLYING RESULT
* First-half net loss of $10.3m v $36.1m loss
* Underlying pre-tax profit of $102.5m vs $42.3m
* Revenue up 6pct to $2.79b
* No interim dividend, unchanged
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