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Qantas employs over 90 percent of its 32,500 employees in Australia, and union fears that it will send jobs offshore helped spark last year's bruising industrial battle that led to the grounding of its entire fleet and prompted intervention by Australia's industrial umpire. "Today Qantas Engineering services costs are at least 30 percent higher than those of our competitors. And we have the ability to change," Joyce said in a statement. He said Qantas would review its heavy maintenance operations in Australia, given the introduction of new aircraft such as A380 superjumbos and Boeing 787s was lowering the age of its fleet. The review was expected to conclude in 60 days and could lead to more job cuts. The airline also planned to consolidate some engineering, ground and maintenance operations at its Sydney hub, and was in talks to sell some catering units.

Joyce said the cut in capital expenditure to a total of AUD$4.6 billion for 2011/12 and 2012/2013, from AUD$5.3 billion projected earlier, would come partly by adopting a capital-light model for a planned Asian premium airline. The proposal is Joyce's answer to turn around an international operation that is losing AUD$200 million a year by setting up an Asian-based airline. Joyce said the airline was still in talks with potential partners. (Airwise)