(Reuters) -Newly relisted Virgin Australia met prospectus guidance with a jump in annual profit on Friday, benefiting from robust demand for travel and moderating fuel prices, and said it expected higher income this business year.

The airline was delisted in 2020 after collapsing due to COVID-19 lockdowns. It was rescued by private equity giant Bain Capital and relisted in June.

Virgin said underlying profit surged 28% to A$331 million ($215 million) for the year ended June.

"We had anticipated that there would be a robust environment and I think there is," Virgin CEO Dave Emerson said on an analyst call.

Larger rival Qantas also posted a jump in profits this week and said the post-pandemic rebound was continuing to build.

Emerson said Virgin planned to grow but not change its strategy of targeting small business, business and "premium leisure" travellers in addition to ordinary consumers.

"In three years' time, fundamentally the network will look larger but it won't look dramatically different to what it looks like now," he said.

Virgin's shares fell 1.7% by midday on expectations that the company, which had slimmed down due to its collapse, would need to spend more.

Citi analysts said in a client note that they expect Virgin's operating leverage "will be more muted given Virgin are pointing to increases to staff, airport and maintenance costs that are expected to be above inflation."

The company said it will grow its fleet size in line with demand, and forecast it would lift its capacity by 4% by the end of December.

It plans to bring forward delivery of a new Boeing 737-8 (Max) so it will have 13 by the end of next June, not 12 as mentioned in its prospectus.

Virgin did not declare a dividend.

($1 = 1.5389 Australian dollars)