Amid definite signs of stabilization in domestic air travel demand and after recording rising passenger number, Virgin Blue Holdings Ltd., Australia's second largest airline group, has upped its earnings forecast for the 2010 fiscal year, as was confirmed by the firm at its annual meeting in Brisbane.

Virgin's founding Chief Executive Brett Godfrey, who is to step down in December 2010, shared that for the coming year, the airline is expecting much more profits than the current year, a statement which comes as a total contrast to the company's August outlook which suggested that next year would be just like the present times.

"While we can't put a number on it... it's fair to say we're more confident today... to say the business will definitely move to profitability in (fiscal) 2010. We're currently profitable again and we expect if the market does nothing else except stay where it is, we'll be able to maintain that guidance", said Mr. Godfrey.

The company has shared that while domestic demands for air travel have hiked manifolds, the international front is still weak, particularly operations to America where the dollar slump is not letting people get out of their 'cautious spending' zone. "People are still taking holidays, still traveling, but basically staying closer to home", Mr. Godfrey shared.

However, with the group's 80% operations under 4 airline brands directed mainly to short routes domestically and across the Asia Pacific, Virgin is sure to benefit from a "substitution effect".