Qantas reports sharp rise in first-half profits

The result in the six months to December 31 was up 164 percent on the same period in the previous year and in line with guidance, "despite challenging conditions in international and domestic air travel markets."

Underlying profit before tax -- the airline's preferred measure of financial performance -- was Aus$223 million, up 10 percent.

Qantas also announced an order for five new Boeing 737-800s and the upgrade of 20 Airbus A330-200s and 10 A330-300s.

The additional Boeing 737-800 aircraft are for the flag carrier's domestic service and for delivery during 2014, the company said in a statement, adding that leases on two existing B737-800s would be extended this year.

"The refurbished aircraft will give Qantas International a truly world-class product in global aviation's most dynamic and competitive market," chief executive Alan Joyce told a press conference.

"Growing with Asia is a major priority for the Qantas Group and this investment underpins our commitment to the region."

Joyce said: "Older narrow body Boeing 737-400s will be phased out by the end of 2013 and Boeing 767s by mid-2015.

"We are simplifying our fleet and making better use of the greater flexibility and higher frequencies that the B737-800s provide, while investing in what will be the best domestic onboard product anywhere in the world with the A330s."

The A330 reconfigurations and new orders will not affect planned capital expenditure of Aus$1.6 billion in 2012/13 and Aus$1.5 billion in 2013/14.

However, Qantas International reported an underlying before-tax loss of Aus$91 million in the six-month period, an improvement of Aus$171 million.

"Qantas International is well advanced in its turnaround plan," Joyce said.

"The 65 per cent improvement in Qantas International's underlying EBIT is testament to the steps taken to remove cost from the businesses, from closing down loss-making routes to retiring aircraft and consolidating operations."

Qantas is planning to broaden its reach in Asia as part of a strategy to turn around its struggling international arm.

The move is a consequence of its global alliance with Dubai-based Emirates, which means services to Asia will no longer be tied to onward links to Europe.

New direct destinations from Australia being considered include Beijing, Seoul, Mumbai, Delhi and Tokyo-Haneda at the same time as increasing capacity and frequency of flights to Hong Kong and Singapore.

Australia's competition watchdog last month gave Qantas and Emirates permission to launch their alliance in which the airlines will coordinate ticket prices and flight schedules.

Qantas will shift its hub for European flights to Dubai from Singapore and end a partnership with British Airways. The tie-up is seen as vital to the sustainability of Qantas, which last year posted its first annual deficit since privatisation in 1995 due to tough regional competition and high fuel costs.