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MELBOURNE, Feb 26 AAP

February 26 2013, 4:27PM

Travel agency Jetset Travelworld will continue to cut costs while it considers ways to boost business.

Jetset on Tuesday booked a net profit of $8.6 million for the six months ended December 31, down 22.9 per cent on the net profit of $11.2 million in the prior corresponding period.

Profit fell as average fares dropped and government spending on travel declined.

But the company said it had reduced costs by 10 per cent, compared to the first half of the prior financial year.

Jetset said it was continuing to work on a "major business transformation" program which began in September 2012.

"Whilst a number of cost-reduction initiatives will continue to be pursued, the significant transformational initiatives are still in their infancy, and the full cost and timing of implementation is being developed," chief executive Rob Gurney said in a statement.

Jetset will pay an interim dividend of one cent per share, compared to 1.1 cents per share in the first half of the prior financial year.

Jetset shares were two cents higher at 43 cents on Tuesday.