Virgin Australia has posted a narrower loss during the March quarter as costs fell, passenger yields improved and budget subsidiary Tigerair recovered to turn a small profit.

The airline suffered an underlying loss before tax of $22 million in the three months to March 31, compared with an $83 million loss during the same period in 2014.

It made a statutory loss after tax of $28 million, compared with $103 million previously.

Tigerair also made a small underlying profit before tax of $500,000, compared with a loss of $25 million in 2014.