Australia's aviation industry is profitable and will continue to grow despite Virgin Australia's complaints about the carbon tax, federal Climate Change Minister Greg Combet says.
Virgin on Tuesday announced a drop in interim net profit and its chief John Borghetti said a competitive market meant the $24.4 million cost of the carbon tax could not be passed on to passengers.
Defending the impact of Labor's carbon tax, Mr Combet said Virgin was a profitable airline.
"On their own figures (the cost of the carbon tax is) the equivalent of $1.50 on an airfare between Sydney and Melbourne," he told Sky News.
"They're in a competitive aviation market. Qantas is bearing the same cost. They're competing on price. Airfares have actually gone down, and last year ... there was a significant lift in domestic air travel in Australia.
"The aviation industry is growing and will continue to grow. It's not going to be turned around by the carbon price."
Opposition spokesman on climate action, Greg Hunt, said Virgin's profit result reflected the impact of the first six months of the carbon tax which came in on July 1.
"Quite clearly this is a tax on tourism, a tax on families and a tax on jobs," he said in a statement.