Virgin Blue are out the red for the year ending 30 June 2010, reporting a net profit before tax of $34.3 million a considerable increase compared to the $226.2 million loss for the same time last year.

The airline also reported a revenue increase of 13.1 percent to $2.9 million as well as underlying earnings of $87.2 million.

The results come as a relief for the company who reported a decline in operations during the fourth quarter.  

The company attributed the decline in demand on the decrease in leisure travel but said the year’s profits were a result of the “strong Australian domestic short haul achieving a 2.7 percent increase in revenue per seat kilometre”.

Virgin Blue CEO John Borghetti said the airline expected positive results and achieving a profit during the current financial situation demonstrates Virgin Blue’s capabilities the results comes as no surprise to the airline.

“Achieving a $34.3 million profit before tax … demonstrates that Virgin Blue’s domestic business has the capability to ride through market and economic volatility, and remain well positioned to extend its reach in key markets.”

The airline said the industry is gaining strength with Virgin Blue achieving a passenger load growth of 0.7 percent from 79.1 percent last year to 79.8 percent in 2010.

“Conditions continue to be volatile and competitive activity continues to put downward pressure on yields,” Mr Borghetti said.

“The soft growth seen at the end of the fiscal year, at this stage, is not sufficient to suggest a consistent across the board improvement in market conditions.”

Mr Borghetti is expecting continued success for Australia’s second largest airline with the addition of two A330-200 carriers to the Virgin Blue fleet as well as announcing a new alliance with Abu Dhabi based airline, Etihad.