Virgin Australia (ASX: VAH) has benefited from the months-long labour dispute at Qantas by registering a first half profit of $51.8 million. It is more than double the $23.8 million the air carrier had compared to the same period a year ago.

The company's underlying pre-tax profit also went up 34 per cent to $96.1 million. It was a third higher than the $63.4 million average forecast made by six analysts. Virgin Air had indicated in 2011 that it expects its 12-month pre-tax profit to go up, but did not provide specific guidance due to the uncertain economic climate.

"While we have continued to see high fuel prices and an uncertain economic environment, the Game Change Program Strategy has helped us to improve earnings stability and achieve growth during this half," The Australian quoted Virgin Australia Chief Executive John Borghetti.

For the same period, the air carrier enjoyed a 5.3 per cent increase in its capacity over its domestic network.

Virgin also announced the creation of a new unlisted entity, Virgin Australia International Holdings Pty, owned by Virgin Australia Holdings (ASX: VAH) stockholders and would take charge of the air carrier's international airlines. The new entity would have a majority independent board of directors and is tasked with facilitating overseas institutional investment in Virgin's domestic business to improve Virgin Australia Holdings' liquidity and enhance shareholder value.

The air carrier's strong first half performance contrasts with the 83 per cent drop in profits reported by Qantas last week due to the prolonged labor row between the flag carrier and its three unions. The dispute is now under the arbitration of Fair Work Australia.

Virgin Australia's half-year result came out days after Air Australia was placed under administration due to financial problems. The sudden collapse of Air Australia, which was even selling tickets before it was shuttered, caused 4,000 passengers to be stranded in Phuket, Thailand.

It was not only Virgin Australia that had good results but also Sydney Airport which reported on Thursday a 3 per cent traffic growth for 2011. Sydney Airport Holdings Limited said the traffic growth amid the Qantas strikes is an indicator of the resilience of the air travel business and the company's ability to translate traffic performance into strong earnings growth.

The Sydney Airport registered a proportionate consolidated airport asset EBITDA of $773.6 million, which is higher to the $750.6 million it reported a year ago.

"SAHL delivered pro forma EBITDA growth of 2.7 per cent in 2011 compared to the pcp, exceeding traffic growth of 2.5 per cent for the same period. This is a strong performance given disruption to the aviation sector from natural disasters, airline groundings and industrial action," SAHL Chief Executive Officer Kerrie Mather said in a statement.

The airport handled 35.6 million passengers in 2011, the same volume compared to the previous year but its fourth quarter passenger traffic dipped significantly to 9.2 million from 9.4 million for the same quarter in 2010 due to the Qantas labor problems and fleet grounding.

For 2011, Virgin Australia introduced a premium product at Sydney Airport's terminal 2, including priority check-in, valet parking and premium lounge entry. The air carrier also introduced domestic wide-body services to Perth and Melbourne.

Ms Mather said 2012 appears to be a promising year with the start of daily services from Kuala Lumpur and Singapore by AirAsia X and Scoot Airlines.

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