Virgin Australia has bought itself time to fix its balance sheet with a $425 million loan from its four major shareholders.
The airline has secured a 12-month loan facility with Air New Zealand, Etihad, Singapore Airlines and Virgin Group while it reviews its capital structure with a view to boosting profitability.
Virgin Australia made a profit of $45.7 million in the six months to December 31, but took on a $US125 million ($A164 million) bank loan during the period.
"The board is focused on optimising the group's balance sheet and capital structure to support the ongoing execution of its strategy," Virgin Australia chairman Elizabeth Bryan said in a statement on Monday.
"This review will ensure the Virgin Australia Group has the best capital structure in place to achieve its strategic goals and generate long-term growth and value for shareholders."
The review will look at the airline's mix of debt and equity capital as well as what it called "operational initiatives".
Investors reacted warmly to the news, with Virgin Australia shares ending the day up three cents, or 8.57 per cent, at $38.00.
"It means their major shareholders are backing the direction of the company," IG market analyst Evan Lucas said.
"The fact they are supported by two of the largest airlines in the world - Etihad and Singapore Airlines - is always going to be a positive."
Air New Zealand confirmed its portion of the loan as $131.2 million, with all four airlines contributing according to the size of their shareholding.
Virgin Australia has borrowed from its major shareholders before, taking $90 million from Air New Zealand, Etihad and Singapore Airlines in 2013 before repaying them following a $350 million equity raising later the same year.
"One of the key pillars of our Virgin Vision strategy is to optimise the group's balance sheet, and the group has had an ongoing program in place to achieve this goal," chief executive John Borghetti said.
"Now is an appropriate time to embark on the next phase of this program."
While Qantas in February announced a record first half profit of $688 million thanks to hedging on fuel prices and its ongoing restructuring program, Virgin Australia's $45.7 million was its best since the first half of 2009/10.
"There is a way to go but they are much further through their transition than they were three years ago," Mr Lucas said.
