Qantas shares have soared after the airline flagged an improved first half with a return to profit, partly thanks to lower jet fuel costs.
The airline forecast an underlying net profit of between $300 million and $350 million for the first six months of 2014/15.
Qantas suffered an underlying net loss of $252 million for the corresponding period in 2013/14 amid a capacity war with rival Virgin.
News of a return to a first half profit for the troubled airline pushed Qantas shares up by 10 per cent in early trade.
The stock was 16 cents, or 7.6 per cent, higher at $2.26 at 1019 AEDT, just off its earlier peak of $2.32.
The airline attributed the change in its fortunes to its transformation program, announced 12 months ago, saying all cost cutting and savings targets had either been met or exceeded.
It will also reap a $30 million benefit thanks to the recent plunge in oil prices and the Australian dollar, which have made jet fuel cheaper.
Chief executive Alan Joyce said he expected the first half result to be the best since 2010.
“This demonstrates that the strategy we have outlined to transform our business is working,” he said in a statement on Monday.
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“This is an improvement of over $550 million compared with the first half last year, with Qantas Transformation being the primary driver of the turnaround.”
The company said all parts of the airline were expected to be profitable at an underlying earnings before interest and tax level.
The airline is due to announce its first half results on February 26.
