Qantas has reported an underlying profit before tax of $1.4bn for the 12 months ended 30 June 2017 on sales of $16.1bn (-0.9%), as net profit slipped 17%, to $853m. The underlying result, down 8.6% from last year’s record, represents the second-highest performance in Qantas’ 97-year history.

The airline said the result — slightly above the guidance range provided in early May — was mainly due to strengthening of domestic businesses. Qantas and Jetstar combined reached a record $865m underlying EBIT on 1.4% lower revenue ($5.6bn), making them again the two most profitable airlines in Australia with around 90% of the total domestic profit pool.

Qantas International, which has faced high levels of capacity growth in the broader market, saw a 36% decline in underlying EBIT, to $327 million, on revenue of $5.7bn.

Unit revenue — ticketed passenger revenue per available seat kilometre (ASK) — was 2% higher on the domestic side, but dropped 5% on international operations. The overall decline of 2% was partially offset by a 1% improvement in unit costs.

The group says it met all the objectives of its financial framework, reporting a 12-month return on invested capital of 20.1%.  Another $470m in transformation benefits were delivered, completing the three-year programme and outperforming the $2bn target by $125m.

Gross benefits from the next wave of ongoing transformation (including cost, revenue and fuel efficiency improvements) are expected to be $400m per year.

Looking ahead, the airline says it is investigating direct flights from the east coast of Australia to London and New York by 2022. It has challenged Airbus and Boeing to give their next-generation aircraft currently under development (Airbus’ A350ULR and Boeing’s 777X) the range to make these non-stop flights possible with a full passenger load.  A direct flight would cut total journey time by up to four hours on Sydney-London and almost three hours on Melbourne-New York.