CEO Alan Joyce announced the enormous plunge in profits - and confirmed that at least 500 jobs would be lost as a result, under a review of the catering and engineering departments.

The airline is also axing international services and reducing capacity on domestic routes.

Qantas will withdraw its loss-making Sydney-Mumbai and Auckland-Los Angeles routes, and plans to reduce capacity on various routes including Sydney-Bangkok, Sydney-Perth and Melbourne-Perth by using smaller aircraft.

These route cuts are in addition to the airline's previous announcement that it would withdraw Hong Kong-London and Bangkok-London routes from next month.

Qantas blamed the $194 million cost of industrial action and the grounding of its fleet, and a $444 million increase in fuel prices, for the profit drop of 83 per cent.

The airline made a half-year net profit of AU$42 million.

Joyce said: "While the impact of the dispute was severe, our portfolio of businesses once again demonstrated its resilience in difficult conditions."

He also blamed increased competition for the decision to cut back on international operations, and said: "even the strengths of the rest of our business will not be able to compensate for this issue over the long term".

The Australian Services Union (ASU) condemned the job cuts as "unnecessary and short-sighted, sacrificing livelihoods and the long-term efficiency of the airline for short-term cost cutting".

"These workers have contributed to sustained profits, but still they're being thrown to the dogs by Qantas," the ASU added.

Picture: Getty