The profit comes ahead of an expected float of the company, potentially next year.

The company now has $1 billion of cash on its balance sheet which it said could be used “for future investment in transformation and growth”.

It’s a dramatic turnaround for the company which was sold to Bain Capital in 2020 for $3.5 billion, which included about $700 million in equity. It went into administration with debts of $6.8 billion when the Federal Government baulked at providing it with a rescue package.

Bain recouped its capital earlier this year.

Chief executive Jayne Hrdlicka said the results were an important milestone for Virgin Australia.

“It has been 11 years since Virgin Australia returned a profit, and our results signal that the transformation of Virgin Australia is progressing well. We have a long-term commitment to transformation and are only part-way through this multi-year journey,” she said.

Underlying EBIT was $439 million, representing a margin of 8.8 per cent.

Its domestic, international, and regional and charter flying recorded revenue of $4.873 billion, an increase of 126 per cent, due to increased flying activity.

Loyalty business Velocity recorded revenue of $330 million, an increase of 68 per cent, with strong member growth through the year, reaching a record 11.5 million members. Underlying EBIT of $77 million represented a margin of 23.4 per cent.

Virgin Australia continues to see healthy demand as customers prioritise travel in the face of cost-of-living pressure.

“By creating a systemically lower cost base and a conservative balance sheet as well as investing heavily in technology and our frontline, we are well positioned for the future.

“Our investment in frontline transformation continues, and is designed to boost capability, customer experience and operational efficiency. Our recent announcement of a $110m cabin upgrade, arrival of the first of our new 737-8 aircraft, market-leading baggage tracking app and Rapid Rebook technology launch all help us to create experiences our guests love,” Hrdlicka said.

“Value and choice are core to our business and as the continuing rise in cost-of-living impacts household budgets, we believe we are well positioned to continue to provide customers with the best value in the market.”

Virgin chief financial officer Race Strauss said the company’s balance sheet was now considerably stronger and the cost base of the business had significantly improved from recent years.

“Future transformation plans put us in a good position to manage cost headwinds and continue to improve our business,” he said.

“Virgin Australia is now in a very strong capital position, with total debt including leases now $2.3 billion and over $1 billion of cash on balance sheet, providing the platform for future investment in transformation and growth. Our transformation plan is well underway and has set up the business for the future.”