Qantas is to buy eight Boeing planes and will return $505m to its shareholders after a more than $3.3bn turnaround in its bottom line.

The Australian airline has posted a net profit of $557m for the year to 30 June, compared to a record $2.8bn loss a year ago.

Its underlying pre-tax profit for the year was $975m, its best result since the global financial crisis and ahead of analysts expectations for a $960m profit.

Qantas has not declared a dividend but will return $505m to shareholders through a 23 cent per share cash distribution.

The company will also carry out a share consolidation, which it says will have a similar effect to a share buy-back.

The firm will also buy eight Boeing 787-9 Dreamliners, which will begin to arrive from 2017. The aircraft, highly regarded for their efficiency and passenger comfort, will join the Qantas’s international fleet from 2017, replacing five of the airline’s ageing 747s.

Qantas had agreed to order the planes in 2005, but made the purchase of the aircraft conditional on a turnaround in its profitability, a reduction in its net debt and a new enterprise bargaining agreement with its pilots, all of which have been achieved under chief executive Alan Joyce.

The dramatic turnaround in the airline’s fortunes follows a sharp fall in fuel prices, as well as Qantas’s efforts to strip out more than $2bn from its cash base as part of a major restructure.

The airline says it has reduced its cost base by $894m during the year and met its target to pay down more than $1bn in debt.

But Joyce said Qantas was only halfway though its turnaround. “We are halfway through the biggest and fastest transformation in our history,” he said.

“Without that transformation, we would not be reporting this strong profit, recommencing shareholder returns, or announcing our ultra-efficient Dreamliner fleet for Qantas International.”

All of the airline’s businesses reported stronger earnings for the year, including its long-troubled international division, which made a $764m year-on-year turnaround.

The division reported underlying earnings of $267m for the year, up from a $497m loss a year ago.

Qantas’s domestic business lifted its earnings to $480m, up from just $30m a year ago. Jetstar recorded underlying earnings of $230m, up from a $116m loss a year ago.

Meanwhile, Qantas’s loyalty business lifted its earnings to $315m, from $286m a year ago.

The airline’s return to profit comes after it launched a three-year transformation program that has included pay freezes for staff and the axing of 5,000 jobs.