Qantas is on course to deliver its first pre-tax profits this year in the three months to September.
The forecast return to the black comes after the Australian carrier reported it biggest annual net loss of A$2.8 billion (£1.6 billion) for the 12 months to June.
The airline blamed a A$550 million drop in revenue due to capacity growth outstripping demand, a record high fuel bill up by A$253 million to A$4.5 billion, weaker domestic demand together with the cost of 5,000 redundancies – 80% of which are expected to be achieved by June next year.
Qantas also faced a A$2.6 billion write-down to the value if its international fleet
Chief executive Alan Joyce told the airline’s annual general meeting that preliminary figures indicate that Qantas has made an underlying pre-tax profit for the first quarter of the 2015 financial year.
Australia’s financial year runs from July to June.
Joyce said: “At our full year results announcement in August I said that the Qantas Group had come through the worst. Today I can reconfirm that statement.”
Shareholders were told passenger numbers were up 2.7% in September compared to a year ago.
Yields at it international are have been positive for six consecutive months as revenue and network initiatives from the carrier’s transformation programme take hold, Joyce said.
Domestic passengers loads and yields were higher in September than in the previous year.
“On the back of the hard work of the people of the Qantas Group, we are on track to deliver an underlying profit for the first half of the financial year,” Joyce said.
“So the transformation programme, coupled with a more benign operating environment, is delivering clear results.”
He added: “Overall, and over the long term, the Qantas Group benefits from the lower Australian dollar. It is already helping our business.
“International capacity growth in this half is expected to be around 2.4% – that is, below underlying demand growth for the first time in five years.
“The weaker currency does mean higher Australian dollar fuel prices, but the falling oil price has more than offset the falling currency over the past six months.
“But I must reiterate – we cannot ease off. We will continue to show the rigour and discipline we have shown so far.
“Take just one example. Aircraft utilisation in the Qantas international fleet this year will have improved by 12% compared to 2013.
“This has allowed us to maintain our international network while retiring the oldest aircraft, just through smarter and more efficient network planning, maintenance and scheduling.
“We can never go back to the cost base and inefficient work practices that left us at such a disadvantage against our competitors and put our future at risk.”