The A380 Rolls-Royce engine incident and fleet grounding had cost Qantas Airways Ltd (ASX: QAN) an estimated $80 million, with $55 million in the first half and $25 million forecast in the second half.

The figure does not include the cost of repair of the damaged aircraft and engines, estimated to be at least $100 million, which are all covered by insurance or by existing contractual arrangements with Rolls-Royce, Australia's national carrier said.

Qantas remains in discussions with Rolls-Royce in relation to a commercial settlement to compensate the airline for the economic loss incurred. While discussions continue, no agreement has yet been reached.

"Those negotiations are moving forward quite well and both parties are keen to settle commercially, rather than go down the legal path," Qantas chief financial officer Gareth Evans told media at the airline's half-year results presentation.

Chief executive Alan Joyce Joyce said, "Qantas' response to this unprecedented event was swift and appropriate. In very challenging circumstances, and with the commitment and hard work of our people, we managed to maintain 98 per cent of our international operations."

Qantas today announced an underlying profit before tax (PBT) of $417 million for the half-year ended 31 December 2010. This result was materially stronger than for the half-year ended 31 December 2009.