Losses at Virgin Australia were trimmed to A$47.8 million (£24.2 million) in the half year to December thanks to lower oil prices and cost cuts.
The figure compared to a loss of A$74.3 million in the first six months of 2014.
The airline made an underlying pre-tax profit of A$10.2 million against a loss of A$45.4 million in the first half of last year. Revenue rose by 6% to A$2.38 billion.
But the carrier said a series of initiatives would be put in place to improve the performance of its international operations.
Chief executive John Borghetti said: “Whilst good momentum is building in our domestic business, which accounts for around 75% of our total business, the international business to areas such as Southeast Asia, the UK and Europe has seen a more challenging environment, constraining yield recovery.
“The performance of the international business has been impacted by increased competitive pressure in key international markets. Virgin Australia will be implementing a series of initiatives to improve the performance of this business.”
The airline is already undertaking a A$1 billion cost-cutting programme over five years.
Lower oil prices led to a A$3 million reduction in fuel costs in the half year and it expects to see a further benefit of A$50 million in the current six months if rates remain at current levels.
Borghetti said that the carrier expects an improved performance.
“However, due to current market conditions, we are not able to provide more specific guidance,” he said.
The carrier is majority-owned by Singapore Airlines, Air New Zealand and Etihad Airways, which together hold a 73% stake. Virgin founder Sir Richard Branson holds a 10% stake.