Monarch Group cut traditional half-year winter losses by a bigger than forecast £40 million.
Losses in the six months to April were down to £69.9 million from £110.6 million in the same period a year earlier.
A total of £30 million of the reduction was attributed to its “self-help” turn around initiative, with the remaining £10 million coming from additional savings in fuel costs.
This came as the group completed the final phase of a restructuring started last year, including a 4% capacity cut over the winter to 2.5 million seats.
Measures to cut £200 million in annual costs from the business, including revamp of its network and fleet, improved revenue management and modernised working practices.
Monarch’s tour operating business reported strong year-on-year growth in online bookings, offsetting some category weakness in high street sales.
Key markets in the Canaries and mainland Spain have grown in line with the airline’s scheduled operations to key city destinations.
Packages to Egypt are seeing some recovery after an unsteady past two years. Greece continues to perform well, despite economic uncertainty and aggressive competition, the group said.
Chief executive, Andrew Swaffield, said: “We remain positive that the changes we have made to the structure of the group, the network and our cost base have set us in good stead to achieve the turnaround.
“It is thanks to the hard work of all 2,800 colleagues employed directly by the company, both on the ground and in the air, that we are focused on service and safety whilst maintaining a low cost base.
“These elements will help Monarch to build a sustainably profitable business.”
Chief financial officer, Barry Nightingale added: “Our winter performance was better than forecasted with substantially reduced losses.
“We have seen stable booking trends throughout the last six months and have seen good summer sales in key months which will help us to deliver against a challenging plan.
“Improved revenue management has played a key part in the turnaround results but, additionally we have put a lot of work into segmenting our customer groups and have been able to take a customer centric approach to reshape our network around increased frequencies to our most popular destinations.
“We have also added new scheduled routes taken from our portfolio of destinations previously served as charter routes to provide a better service and increased flexibility to customers.”
Monarch launched a group wide employee bonus scheme earlier this year to reward the “commitment and hard work” of staff. Key performance indicators are aligned to company performance and the punctuality of the airline.
Swaffield said: “It’s clear that people who work for Monarch genuinely care about the company and our customers. That is directly reflected in the great service and natural warmth which comes as standard.
“The bonus scheme is designed to ensure that we focus on the right things such as company performance and airline punctuality (OTP).
“This year we have already improved, and our average OTP figure for the first six months is 83.2%, compared to 80% for the same period last year.”