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Australian airline Qantas will also be axing around 500 jobs after a review of its maintenance and catering businesses, early retirement of aircraft and the abandonment of two major international routes.

As part of Qantas’ cost-cutting plans it will be scrapping its Auckland to Los Angeles services from May 6 following an 83 percent slump in half-year profits.

The airline has just reported an 83 percent fall in its first half net profit to $A42 million to December 31, 2011, down from $239 million in the same period last year.

It has also said it will slash capital expenditure by $200 million in the 2011/12 financial year and cut $500 million from spending in 2012/13.

Redundancies within the airline are also part of cost cutting aimed at countering economic volatility.

“Job reductions are expected as a result of aircraft retirements and operational changes within the airline,” said the airline.

Meanwhile the NZ Herald reported that Air NZ will have monopoly over the NZ-LA route with Qantas out of the play in this segment.

The paper also quoted two leading travel agencies saying Air NZ will now have the opportunity to increase its fares although a company spokesperson said the airline had no plans to raise fares immediately.

Full story National Business Review

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