Qantas has suffered a massive $2.8 billion loss in the wake of the airline's profit-draining battle with rival Virgin and another poor performance from its international division.
The airline posted a net loss of $2.84 billion for the year to June 30, compared to a $1 million profit a year ago.
The result included a $2.6 billion writedown to the value of its ageing international fleet.
Excluding the writedown and other one-off costs, Qantas made an underlying pre-tax loss of $646 million, compared to a $186 million profit a year ago.
Chief executive Alan Joyce described the result as "confronting", but said the massive loss represented the year that is past.
"We have now come through the worst," he said in a statement on Thursday.
"With our accelerated Qantas transformation program we are already emerging as a leaner, more focused and more sustainable Qantas group."
Meanwhile, the airline has ruled out selling or floating its profitable frequent flyer business, Qantas Loyalty, in order to fund its turnaround.
"After careful consideration, our judgment was that Qantas Loyalty continued to offer major profitable growth opportunities, and there was insufficient justification for a partial sale," Mr Joyce said.
Qantas has also decided to separate its domestic and international arms and created a new corporate entity for the Qantas International.
Mr Joyce said changes to the Qantas Sale Act paved the way for this change.
"This will have no impact on the day-to-day operations, network or staffing at Qantas International," he said.
The carrier has also announced it will write down its entire fleet of Boeing 747s and A380s, at a value of $2.6 billion.
Qantas Loyalty was easily the most profitable part of the business.
Its underlying earnings lifted to $286 million.
The airline's frequent flyer program had 10 million members at June 30.
But fuel costs across group operations climbed by more than $250 million to a whopping $4.5 billion.
Qantas ruled out any new Jetstar ventures in Asia while it tried to get itself back to profitability.
But Mr Joyce is confident about the future of the operations in Singapore and Japan.
"In the world's fastest growing aviation market, this is a major long-term opportunity," he said. "We know that substantial value exists across the Jetstar airlines."
Meanwhile, Qantas confirmed it won't be making more job cuts beyond the 5000 already announced as part of its $2 billion three-year restructuring program.
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