Qantas remains “financially strong” after becoming one of the few airlines to stay in the black over the past 12 months. Nevertheless, net income for the Australian flag carrier for the year ending 30 June slumped 88% to AU$117m (US$96.5m), leading it to announce an AU$1.5bn campaign of further cost cuts.

“When most airlines are reporting losses, the Qantas group is reporting a profit for the full year,” said Qantas chief executive Alan Joyce.

“Through unprecedented and significant shifts in operation conditions and demand, we have remained financially strong.”

Qantas, like most others across the world, has been struggling with falling demand during the downturn, as well as the impact of the swine flu virus on international travel.

The airline said it would not pay out a dividend, and also said it could not offer any guidance on profits for the next financial year “given the high level of uncertainty”.

He said the diversity of the group’s operations enabled the national carrier to deliver a full-year profit. But added: “There has never been a more volatile and challenging time for the world’s aviation industry.

Sales fell 6.9% to AU$14.5bn due to weakness on both domestic and international fronts. However its budget operator Jetstar increased capacity as the leisure market proved more resilient.

Mr Joyce also said the focus on keeping costs in check and driving efficiencies had helped the group remain in profit.

“At the same time, we continued to stimulate the market via pricing initiatives and maintained a strong focus on customer service, safety and environmental performance,” he added.