Australia's flagship carrier Qantas has reported strong results, buoyed by a 40% jump in profits on domestic routes.

"It's gratifying after coming out of a tough period," said chief executive Geoff Dixon.

Qantas benefited from the collapse of rival airline Ansett in September, giving it almost complete control of the domestic market.

Qantas is one of just a few airlines that has seen its profits rise despite the devastating impact of the 11 September terrorist attacks on New York.

It now aims to raise 800m Australian dollars (US$432m; �282m) in a rights issue to shareholders in order to upgrade its fleet.

New staff, new planes

The firm saw its profits rise by 3% to Aus$428m during the financial year which ended in 30 June.

While pre-tax profits from international operations were more than halved, domestic profits rose to Aus$468m.

Company chairman Margaret Jackson said the final results were pleasing given the extraordinary circumstances that pushed two of its rivals into bankruptcy.

During the year, the firm boosted its staff by about 1,500 and added new planes, including 15 Boeing 737-800s.

The carrier insisted its commitment to further investment remained strong.

"We need to continue to invest in new aircraft, quality in-flight products, terminal facilities and modern infrastructure," said Mr Dixon.

The firm said it expected the recovery trend to continue but would not elaborate on growth expectations.