Virgin Blue Holdings Ltd (ASX: VBA) said on Thursday that it has regained profit status in fiscal 2010 as it announced further growth strategies by forging more global partnerships and upgrading its domestic fleet with fresh Airbus aircrafts.

The airline group said that as of June 30 this year, its 12 months net profit has accumulated a total of $21.3 million, coming from the $160 million of losses posted last year, while the company's underlying net profit before tax and exceptional items reached $31 million during the same period.

Virgin Blue chief executive John Borghetti said that the latest results were within the group's previous guidance of between $20 million and $40 million and even beyond the market expectation of $28.1 million.

Also, Mr Borghetti clarified that the results absorbed the impact of the slow down that marred the operating environment of the airline industry during the last three months of the fiscal year.

Still, the company achieved a net profit before tax of $34 million, which according to the chief executive, "demonstrates that Virgin Blue's domestic business has the capability to ride through market and economic volatility, and remain well-positioned to extend its reach in key markets."

Mr Borghetti announced at the same time that two Airbus aircrafts would start servicing routes between Perth and the Australian east coast while the group's long-haul offshoot, V Australia, would halt its flight destinations to Phuket and Johannesburg.

V Australia would instead fly on routes between Abu Dhabi and Sydney in 2011 and between Brisbane and United Arab Emirates in 2012 following its tie-up with Etihad Airways, which would commence on October 1.

Virgin Blue said that the partnership is the first for an Australian airline in the Middle East since 1991 as the company looks ahead for further alliances on the trans-Pacific routes with Delta Air Lines and on trans-Tasmanian services with Air New Zealand, providing the company the leeway "to seamlessly extend its reach to many more overseas destinations, with little capital expenditure."

The airline group said that the planned partnership would be subjected to approval by the Australian Competition and Consumer Commission (ACCC) as it stressed that "it is with this further cooperation that the airlines will be able to offer the full program of benefits the partnership will bring."

Virgin Blue said that growth outlook remains tentative amidst the volatility and stiff competition that characterised the present environment of the airline industry but the company is ready to make some adjustments once recovery proved to be elusive by the end of 2010.

Mr Borghetti expressed confidence that in case of further slow downs, "we do have flexibility to adjust capacity through lease returns and rescheduling of aircraft deliveries."