Qantas chief executive Alan Joyce is in a sweet spot. Qantas and Jetstar command 90 per cent of the profitability of the domestic airline market, which is good for shareholders but less so for customers. Airline analysts say customers should brace for a hike in airfares in the next year as the company prepares to cut domestic capacity.

Joyce on Friday announced the second-biggest full-year profit in the airline's 96-year history, while setting an ambitious course to rebuild the airline's once-troubled international division. The strategy will have two prongs: buy planes that will fly direct from Australia's east coast to Europe and the United States, and expand capacity on Asian routes.