Qantas Airways, Australia's biggest airline, said its return to full-year profit was aided by its Emirates partnership which gave a much-needed lift to its loss-making international operation.
Qantas reported a full year profit of A$6m ($5.4m, £3.5m, €4m) in the year ending 30 June, after previous net loss of $244m. The company posted an underlying pre-tax profit of A$192m in the year, up from A$95m.
The airline's shares soared after the release of its annual results, closing 13.82% higher in Sydney on 29 August.
Qantas said that the company's loss-ridden international operations, which face cut-throat competition, halved their losses over the year to A$246m.
Domestic operations, including Qantas Domestic, Jetstar and Qantas Loyalty, were all profitable.
Qantas said that it is avoiding profit guidance this time because of the high degree of volatile market conditions and rising fuel costs, along with ongoing uncertainty in the global economy.
The underlying fuel costs for the Group are expected to be about A$2.34bn in the coming year.
Domestic and International Operations
The domestic market has grown at its fastest rate in the past eight years over Qantas's last twelve month trading period said Alan Joyce, the airline's chief executive.
However, the domestic division's profit slumped 21% on the year to A$365m.
"The market is very tough. But we are focused on the elements we can control. We have Australia's leading airlines and loyalty business- and we have a clear strategy to build and even stronger business for the future," Joyce said in a statement.
He said that the partnership with Emirates has helped in boosting their international business.
"The Qantas-Emirates partnership gives the group a strengthened position on routes to Europe, the Middle East and North Africa, via the global hub of Dubai," Joyce added.
"Bookings have been very positive, running at about twice the level of Qantas' previous code-share arrangements for flights to Europe."
Furthermore, the airline has stopped using older planes on loss-making routes such as London to Hong Kong and Singapore to Frankfurt in order to reduce losses.
Qantas Airways won a conditional approval in March from the country's competition watchdog for its alliance with Emirates to collaborate on pricing, sales and flight scheduling over the next five years.
The deal which is subject to various conditions is expected to complete by 2014. Financial details of the deal were not mentioned.