Virgin Australia has unveiled its first profit in 11 years, reporting a $129 million net profit for the 2022-2023 financial year.

It came as the airline’s annual revenue boomed to $5 billion as the company, and Australia, rebounded out of the COVID pandemic.

At Virgin Australia’s airline business (which includes domestic, international, and regional and charter flying), revenue was up 126 per cent to $4873 million, due to increased flying activity.

The bumper result announced on Tuesday represents a significant turnaround on last year’s net loss of $565.5 million.

“These results are an important milestone for Virgin Australia,” chief executive Jayne Hrdlicka said.

“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 multiyear journey.”

Hrdlicka said Virgin was well-positioned for the future, with a systemically lower cost base and a conservative balance sheet, as well as having invested heavily in technology and its frontline.

“Our investment in frontline transformation continues, and is designed to boost capability, customer experience and operational efficiency. Our recent announcement of a $110 million 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,” she 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’s return to the black came less than two months after key rival Qantas also reported a stellar year, with a record underlying profit after tax of $2.47 billion. The flying kangaroo teamed its profit announcement with news of plans to replace its ageing fleet of Airbus A330s with two dozen new aircraft to meet “incredibly robust” demand.

Since the, however, Qantas has been embroiled in scandals over pandemic-era flight credits, its role in the federal government decision to ban international rival Qatar Airways from increasing flights to Australia’s major centres, and a High Court ruling that it illegally sacked nearly 2000 workers.

The ongoing strife led to the premature departure of former chief executive Alan Joyce last month. He is still due to appear at a Senate inquiry into the aviation industry, but remains overseas.

On Tuesday, Virgin noted its revenue for its loyalty business Velocity was up 68 per cent to $330 million, with strong member growth through the year. It now has a record 11.5 million members.

Virgin also said record travel demand for leisure and the return of small and medium-business customers to pre-COVID levels had enabled significant revenue recovery.

It said efficiency initiatives had delivered a significant increase in profitability, despite a spike in higher fuel prices. Virgin Australia said it continued to see healthy demand as customers prioritised travel, even in the face of cost-of-living pressure.

Chief financial officer Race Strauss said the airline’s balance sheet was considerably stronger and its cost base had significantly improved on 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.”