Qantas is handing back more than $500 million to shareholders after pulling off one of the biggest turnarounds in Australian corporate history, lifting its bottom line by $3.3 billion.
The airline made a $557 million profit just a year after posting a record $2.8 billion loss.
Its underlying pre-tax profit of $975 million, which excludes changes in the value of its fleet and redundancy costs, was its largest since the global financial crisis, and up from a $646 million loss a year ago.
A clearly jubilant chief executive Alan Joyce declared the profit was larger than that of rivals Virgin Australia, Singapore Airlines, Etihad and Air New Zealand combined.
The dramatic turnaround was driven by a sharp fall in fuel prices and Qantas' efforts to strip out more than $2 billion of costs.
It allowed the airline to reward its long suffering shareholders with a $505 million cash windfall, via a one-off 23 cent per share payment.
It also opens the way for Qantas to finally add the Boeing 787-9 Dreamliner to its international fleet - an aircraft prized by airlines for its greater fuel efficiency and attractive economics, and by customers for its relative comfort.
Eight Dreamliners will replace five ageing 747s from 2017, and Qantas has options and purchase rights over another 45 aircraft.
The planes carry a smaller number of passengers than the 747 but can fly much further without refuelling.
"It allows us to open up markets that we've never considered before, markets that couldn't have worked with the 747," Mr Joyce said.
The airline's fuel bill shrank by $600 million from a year ago, while costs were down $894 million following massive job cuts.
Qantas has so far cut 4,000 of the 5,000 jobs it has committed to axe - and implemented an 18-month wage freeze for staff.
All of the airline's divisions recorded strong earnings growth, with the star performer its long-troubled international business.
It recorded underlying earnings of $267 million for the year - a $764 million turnaround from the previous year's heavy loss.
Mr Joyce singled out the international business as a key driver of the group's performance for the year ahead, expecting its growth to offset a "patchy" outlook for its domestic business, which has been affected by weakness in the resources sector.
The airline's turnaround was not without its critics, with the Transport Workers Union saying cost cuts were forcing some of its lowest paid employees into poverty.
"One in five aviation workers are earning below the poverty line and this is because of the poor quality, part-time nature of jobs at airlines like Qantas," he said.
Qantas shares rose in early trade, but amid a heavy share market fall closed 23 cents lower, or 6.1 per cent, at $3.53.
QANTAS FLIES HIGH WITH MASSIVE TURNAROUND
* Net profit of $557m, compared to $2.8b loss
* Underlying profit of $975m, compared to $646m loss
* Revenue up 3pct to $15.8b
* No final dividend
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