Qantas will hand over yet more cash to shareholders with another buyback after the carrier lifted first-half profit 18 per cent to $607 million.
Net profit for the six months to December 31 fell short of 2016's record $688 million due to $119 million of costs including redundancies and the introduction of the Dreamliner aircraft.
But underlying pre-tax profit soared 14.6 per cent to a record $976 million - beating guidance of $900 million to $950 million - and the airline said it will again give money to shareholders by buying back up to $378 million of shares over the second half.
The move, which will take the total spent on buybacks since 2016 to more than $1.6 billion, helped Qantas shares climb 5.9 per cent to $5.58.
Chief executive Alan Joyce said Thursday's result included $181 million of benefits from the long-running transformation program - which has included hefty redundancies, route changes and aircraft retirements - and that Qantas had a full-year target of $400 million.
"After several years of consistent performance, we now have a lot of momentum behind us," Mr Joyce said.
"We're vigilant about maintaining that momentum and we're confident about the future it allows us to build."
Net passenger revenue rose to $7.493 billion from $7.064 billion in the prior corresponding period, while freight revenue jumped to $440 million from $416 million.
Citi analysts said Qantas domestic was a stand-out performer with 5.3 per cent revenue growth and a 20.4 per cent lift in underlying earnings before interest and tax.
"Overall, the market should be pleased with another record result," Citi said.
Budget subsidiary Jetstar reported record half-year underlying earnings of $318 million, up 15.6 per cent on the back of improved domestic demand and capacity management.
That was despite a $10 million hit to international operations from last year's Bali volcano eruption.
Total group capacity is expected to increase by about one per cent in the second half - driven by a two-to-three per cent rise in international capacity - but Qantas expects continued growth in so-called unit revenue.
QANTAS SOARS IN FIRST HALF
* Net profit up 17.9pct to $607m
* Total revenue up 5.8pct to $8.66b
* Interim dividend 7.0 cents unfranked, vs 7.0 cents half-franked in pcp
