Qantas Airways expects profit before tax of between A$50m (£27m) and A$150m in the six months to December 31, the company said in a statement to the Australian stock exchange.

The airline earned A$210m in profit after tax for the same period a year earlier, but earnings plunged after that. It reported a net profit of A$117m for the full year to June 30, 2009, a decrease of 88pc from the previous year.

Qantas said passengers on the company’s two airlines — Qantas and the budget carrier Jetstar — were 6.9pc higher in the year to November.

“Operating conditions have improved when compared to the second half of 2008/09 financial year with passenger volumes and yield improving,” the statement said.

In a separate statement, chief executive Alan Joyce said Qantas would start adding more flights between key Australian cities in response to rising domestic demand. The airline will add some 340,000 seats on domestic flights in the next 12 months to restore capacity that shrank in response to the economic downturn.

Qantas declined to give a profit outlook for the full 2009-2010 year, saying economic conditions, passenger demand, fuel prices and other factors were still volatile. Airlines around the world have been hard hit by the global downturns