Qantas job cuts first of many as rivals grow

Hundreds more Qantas jobs could go with the airline reviewing its whole Australian operation in the face of the soaring dollar and gloomy global economic climate.

The airline confirmed yesterday it would slash 500 jobs as it restructures its engineering and catering arms.

It will also shake-up its services, axing some international flights and reshuffling domestic routes.

The news came as Qantas reported an 83 per cent drop in its first-half net profit to $42 million to December 31, 2011, down from $239 million the previous year.

Chief executive Alan Joyce blamed greater international competition, soaring fuel costs and the European economic crisis.

The airline said it also lost almost $194 million in the almost year-long industrial dispute which included $70 million when it grounded its fleet to short-circuit industrial action.

Mr Joyce expected 500 jobs to go immediately and more to follow as Qantas consolidated its maintenance facilities in Sydney, Melbourne and Brisbane.

"We will not be propping up the past at the expense of the future," he said.

Job losses relate to the earlier replacement of Boeing 747s and 767s, that were designed in the 1960s and 1970s and need more maintenance than new planes.

But Australian Licensed Aircraft Engineers Association secretary Steve Purvinas said Qantas would have had a healthy profit had it not "taken on" its workforce and grounded its fleet, which would have saved $194 million.

Workplace Relations Minister Bill Shorten said Qantas' overseas operations were under undoubted pressure competing with heavily subsidised or government-owned airlines.

He said the Government was keen to work with Qantas to ensure job losses were at a minimum.

Opposition Leader Tony Abbott said the situation for Qantas would get worse under the carbon tax.

But independent Senator Nick Xenophon said Mr Joyce should lose his job, not Qantas workers, because it was the boss who grounded the airline.

He said Mr Joyce's "unilateral brinkmanship" damaged the Qantas brand.

Of the 500 jobs to be axed, most will be from the engineering division and Mr Joyce said he hoped most would be voluntary redundancies. Other cuts will be in its catering arm.