Virgin Australia chief executive John Borghetti has been handed a multimillion dollar pay rise in return for making the airline cash flow positive for the first time in five years.

The airline ran at a $186 million net loss in the 2017 financial year, after losing $225 million a year earlier, and its executive team failed the profit metric on the scorecard used to determine bonuses.

Virgin boss John Borghetti has been rewarded for getting cash-flow under control and executing on the airline's turnaround plan. Credit:Nick Moir

But Virgin's annual report, released on Wednesday, shows the company's board weighted 25 per cent of the bonus scorecard to improving free cash flow, and another 25 per cent towards implementing its Better Business turnaround plan.

Both targets were "exceeded", with positive cash flow of $34.3 million compared to $92 million in the red in 2016, and the turnaround plan running ahead of schedule. Other targets around guest satisfaction and safety were also met.