Profit before tax soared 73 per cent over the same period a year earlier to a record 905 million dollars as revenue rose 6.4 per cent to 8.1 billion dollars.

Net passenger revenue including fuel surcharge recoveries increased by 8.4 per cent to 6.5 billion dollars.

Traffic, measured in revenue passenger kilometres, jumped 6.3 per cent while yield improved by 2.2 per cent.

Excluding unfavourable foreign exchange rate movements, net passenger revenue was up 10.6 per cent, with yield up 4.3 per cent.

The airline declared a fully franked interim dividend of 18 cents per share compared with 15 cents per share in the previous corresponding period.

Qantas chairman Leigh Clifford said the result reflected the success of the airline's business transformation programme started five years ago.

'While we have benefited from a strong revenue environment, our focus has also remained on costs, efficiencies, customer service and product improvement,' Mr Clifford said in a statement.

Qantas also announced the merger of its Qantas Holidays, Qantas Business Travel and Jetset Travelworld businesses.

Looking ahead, Qantas said it sees no significant dampening in demand in most markets, especially in the domestic and Australian outbound travel markets, due to the global economic slowdown.

However, the airline noted softening in the UK and continued weakness in Japan.

Qantas reiterated its previous guidance for full year to June profit growth of at least 40 per cent.

'The first seven weeks of 2008 and our forward bookings are in line with forecast and we are confident of achieving a full year profit for 2007-08 at least 40 per cent higher than the reported 2006-07 profit before tax result,' the airline said. -- AFP