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Lower fares and stronger competition have taken their toll on profits at Qantas for the six months to December.

More empty seats on flights contributed to a 7.5% fall in underlying pre-tax profit to A$852m ($656m; £527m), while revenue slipped 3.3% to A$8.18bn.

The results were better than guidance given by the airline.

Shares rose more than 5% in morning trading in Sydney to A$3.73, although the stock is flat over the past 12 months.

Chief executive Alan Joyce said: "The international market is tough because of capacity growth and lower fares, and Qantas International is not immune from those pressures."

Wi-fi in the sky

The airline planned to remain disciplined on capacity, keep costs down and introduce new aircraft and offerings such as high-speed Wi-Fi.

Qantas will start flying the Boeing 787-9 Dreamliner this year.

Qantas also said it expects to start offering free onboard Wi-Fi on domestic routes in the coming weeks, followed by international services later in the year.

The company did not give annual profit guidance as the short-term outlook remains subject to variable factors, including "oil price movements, foreign exchange movements and global market conditions".

In the year to June 30, Qantas posted a record net profit of A$1.42bn and announced its first dividend payout to shareholders in seven years.

That followed cuts of A$2bn to costs and restructuring, with thousands of jobs axed and dozens of aircraft sold or orders deferred.