Virgin Australia reported its strongest half-year earnings in more than a decade, thanks to the airline’s restructuring program and surging domestic business.

The Virgin Australia Group posted a net profit of A$73.8 million ($52.5 million) for the six months through Dec. 31, 2018, its fiscal first half. That is up 1,577.3% from a A$4.4 million net profit for the same period a year earlier. The airline also reported an underlying pre-tax profit increase of 37.1% to A$112.3 million, its highest in 11 years.

The latest half-year earnings report will be the last under long-time CEO John Borghetti, who is stepping down in March to be succeeded by Paul Scurrah. The multiyear Better Business Program he oversaw was yielding A$355 million in annual savings by the end of 2018, with savings expected to reach A$400 million a year by June 2019.

Group revenue for the fiscal first half was up 10% to A$3.1 billion, compared to A$2.8 billion for the 2017 period. That offset an A$88.2 million increase in fuel and foreign exchange costs.

The mainline domestic operation was the group’s strongest performer, with record earnings before interest and tax (EBIT) of A$176.7 million, up 26.8% year-over-year (YOY). Domestic revenue rose 10.3% YOY, with unit revenue increasing 7.1%, capacity up 3% and yield up 6.3%.

The international operation fell to a A$12 million EBIT loss for the first half, compared to a loss of A$2.7 million a year earlier. International revenue was up 15.2% to A$666 million, compared to A578 million a year ago, although fuel and foreign exchange costs rose by A$32.2 million. Unit revenue increased 0.8% and yield was up 3.4%, on a 14% capacity rise.

LCC subsidiary Tigerair Australia reported an EBIT loss of A$8 million, compared to an A$8.3 million loss in the year-ago period. Revenue was essentially flat, although capacity was down 11.5% YOY. Unit revenue increased 13% and yield rose by 14.2%.

The group’s fleet—including its charter and regional operations, and Tigerair—comprised 133 aircraft as of Dec. 31, the same as of June 30, 2018.

Adrian Schofield, adrian.schofield@informa.com