Australia’s Qantas Airlines Has Made $1.4 Billion in Profits This Year

Australia’s biggest airline, Qantas Airways Ltd. (qubsf), posted its second-highest underlying annual profit on Friday, beating analyst estimates as aggressive cost-cutting helped offset fierce price competition from international rivals.

Chief Executive Alan Joyce said the result vindicated a three-year turnaround strategy and vowed to maintain the momentum by finding another A$ 400 million ($ 315.92 million) in savings each year.

“We’re taking the energy and focus from the turnaround and putting it into continuous improvement,” Joyce told reporters.

“We have a clear programme to deliver A$ 400 million in benefits every year, and it’s already started.”

The benefits will come from initiatives like adding more seats to budget arm Jetstar’s aircraft, improving aircraft turnaround times and introducing more modern planes like the 787-9.

Pre-tax profit, the company’s most closely watched measure, was A$ 1.4 billion ($ 1.11 billion) for the year to June 30, down 8.6 percent on the prior year’s record but at the top of its guidance range of between A$ 1.35 billion to A$ 1.4 billion.

Six analysts polled by Thomson Reuters I/B/E/S had forecast an average of A$ 1.38 billion pre-tax profit.

For the past three years, Joyce has slashed staff numbers and the number of seats the “Flying Kangaroo” sells in order to drive up fares and withstand competition from international carriers as well as the soft business travel market at home.

The strategy delivered a record profit last year after a string of hefty losses, putting the airline in a position to undertake share buybacks to boost its stock price and offer staff bonuses.

On Friday, it said it would buy back A$ 373 million of shares and fork out A$ 55 million in bonuses, giving 25,000 non-executive staff A$ 2,500 each.

Qantas also confirmed plans to sell non-stop flights from Sydney to London and New York by 2022 if Airbus SE or Boeing Co (ba) can deliver aircrafts capable of travelling the distance.

“From next year we will be flying direct from Perth to London, which is a huge leap forward. We believe advances in technology in the next few years will make Sydney to London direct a possibility,” Joyce said in a statement.

The 97-year old airline declared a final dividend of 7 Australian cents a share, the same as the previous year.

Qantas shares fell 1 percent to A$ 5.74 in morning trade, while the broader S&P/ASX 200 index fell 0.17 percent. ($ 1 = 1.2661 Australian dollars).