Australia's biggest airline Qantas Airways Ltd set new cost-cutting targets on Friday after posting its second-highest annual profit and confirming its ambitions for non-stop flights from Sydney to London and New York. CE Alan Joyce said the underlying profit vindicated a three-year turnaround strategy and vowed to maintain the momentum by finding another A$400m in savings each year. "We’re taking the energy and focus from the turnaround and putting it into continuous improvement," Joyce said. Benefits would come from initiatives like adding more seats to budget arm Jetstar's aircraft, improving aircraft turnaround times and introducing more modern planes like the 787-9, the airline said. Underlying pre-tax profit was A$1.4b for the year to June 30, down 8.6% on the prior year's record but at the top of the airline's guidance range. It beat market expectations of A$1.38b. "The big positive looks to be the dramatic improvement in both domestic and international revenue per available seat kilometre (RASK) in the fourth quarter and the implications that has into FY18," said Sondal Bensan, an investment analyst at Qantas's biggest shareholder, BT Investment Management. RASK fell 3% in the domestic market and 9% in the international market in H1. But in H2 it rose 3% in the domestic market and was only 2% lower in the international market. Qantas said it would cut domestic capacity by 1% in H1, in a move expected to drive up ticket prices further.<br/>