Australian airline Qantas has returned to profit as its partnership with Emirates cut losses at its international arm.

However, profits at its domestic arm dropped in the year to June 30th, a result of increasing competition threatening its dominance of the market.

Alan Joyce, chief executive, said: “The Qantas-Emirates partnership gives the group a strengthened position on routes to Europe, the Middle East and North Africa, via the global hub of Dubai," he said in a statement.

"Bookings have been very positive, running at about twice the level of Qantas' previous code-share arrangements for flights to Europe."