Qantas has continued its stunning turnaround by reporting a net profit of $A688 million for the first six months of the 2015-16 financial year.

The strong first half performance came on the back of its A$2 billion transformation program, revenue growth, and the benefit of lower fuel prices.

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“We’ve seen improved revenue in our domestic and international operations, reduced costs across the group, and expect another record half-year result from Qantas Loyalty,” chief executive Alan Joyce said in a recent statement.

Despite the profit turnaround, the board elected not to pay an interim dividend, choosing instead to buy back up to A$500 million worth of shares, which is likely to push up the value of the shares that remain on the market.

Qantas had expected to post an underlying profit before tax of between A$875 million and A$925 million for the first six months of the current financial year. That figure ended up being A$921 million.

The airline posted a record A$2.84 billion net loss in 2013-14, the worst in its history. At the time, the Qantas chairman labelled the result “totally unsatisfactory” and many pundits called for the resignation of CEO Alan Joyce, but he survived to announce Tuesday’s result.

Qantas posted a net profit of A$557 million for 2014-15.

– with AAP