Australia's national flag carrier, Qantas, has reported a 4.3% fall in annual net profits, but says it is cautiously optimistic for the future.
It made 112m Australian dollars ($100m; £64m) in the year to the end of June.
Lower ticket prices due to competition at home and the aftermath of the global recession played a part in sales falling 5.7% to A$13.8bn.
Meanwhile disruption caused by the Icelandic volcanic ash cloud led to lost revenue and extra costs of A$46m.
But the continuing recovery in demand for leisure travel and premium class seats meant that profit for the next six months could be "materially stronger" than a year earlier, chief executive Alan Joyce said.
Australia was one of just a handful of major economies that avoided falling into recession during the global downturn.
Qantas, which includes budget subsidiary Jetstar, controls about two-thirds of the Australian domestic market and about 30% of international passenger travel to and from the country.