Australian carrier Qantas on Thursday roared back into the black in a stunning turnaround of fortunes driven by aggressive cost-cutting, while placing an order for eight Boeing Dreamliners.

The airline posted a Aus$557 (US$409 million) annual net profit in the year to June 30, a sharp recovery in the space of 12 months from an Aus$2.84 billion net loss in the previous corresponding period.

Underlying profit before tax -- Qantas' preferred measure of financial performance, which excludes one-off costs and write-downs -- was Aus$975 million, compared to a Aus$646 million loss in 2014.

Qantas said its cost-cutting programme had helped save Aus$894 million over the year, while lower fuel prices also helped bolster the bottom line.

No dividend was declared but the airline announced a one-off 23 cents per share capital return to shareholders, amounting to Aus$505 million.

Chief executive Alan Joyce said the purchase of the eight new planes signified the scale of the airline's turnaround and signalled a new phase of growth.

"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.

"We have reshaped our business for a strong, sustainable future –- and because we moved quickly and made tough decisions early, we have strong foundations to build on."

The reversal in fortunes appeared to vindicate Joyce's strategy to slash Aus$2.0 billion in costs and axe 5,000 jobs to help counter a price war with domestic rival Virgin Australia.

Qantas' under-pressure international arm reported earnings of Aus$267 million, a significant turnaround from the Aus$497 million loss in the previous financial year, which it attributed to better revenues and cost-cutting.

To build on the transformation, the company will buy eight new Dreamliners to gradually replace older Boeing 747s on international routes with delivery from calendar year 2017.

"New aircraft types have always unlocked opportunities for Qantas," Joyce said.

"When our red tail Dreamliners start arriving in two years’ time, their incredible range and fuel efficiency will create new possibilities for our network."