Qantas has reported a 234 per cent jump in its first-half profit to $688 million.

Key points: Qantas profit soars 234 per cent to $688m

Qantas profit soars 234 per cent to $688m Company announces $500m share buyback, but no dividend

Company announces $500m share buyback, but no dividend CEO Alan Joyce said each segment of the business was profitable

The airline enjoyed rising revenue, up 5 per cent to $8.46 billion, but benefitted even more from falling costs, especially jet fuel which saved it $448 million compared to the prior period.

Excluding one-off write downs, the company's underlying profit rose 151 per cent to a record $921 million, which was at the upper end of expectations.

Despite the profit turnaround, the Qantas board has elected not to pay an interim dividend.

Instead, the company is buying back up to $500 million worth of its shares, which should push up the value of the shares remaining on the market.

Group earnings from domestic operations - both Qantas and Jetstar - rose 90 per cent to $556 million.

After several tough years of trading, Qantas International had a significant change in fortune with earnings up almost 360 per cent to $270 million, while the loyalty cards business saw a more modest 10 per cent uplift to $176 million.

Freight was the only significant business to go backwards, down 10 per cent to $38 million.

The company said it was ahead of schedule to cut $2 billion worth of costs by the end of next year, with 4,500 of a targeted 5,000 jobs already cut and more than $1 billion worth of debt removed from the balance sheet.

Qantas chief executive Alan Joyce described the result as the best in the national carrier's 95-year history.

"Every segment of the group has contributed strongly to today's results, with each reporting a rate of return above our cost of capital," Mr Joyce said.

"Qantas domestic, Jetstar and Qantas loyalty all achieved record results for the half, a combined earnings between Qantas domestic and Jetstar domestic rose more than 90 per cent to a record $556 million as we continue to evolve the dual brand strategy.

"Strong cash flow generation was another highlight with operating cash flows of $1.4 billion almost double the prior half year.

"Cash flows of $770 million, this gives us a very solid platform to invest in the future."

However, investors proved tough to please and Qantas shares opened down in a generally stronger market - by 10:28am (AEDT) they had lost 4.5 per cent to $3.81.