Australian flag-carrier Qantas has said it will cut as many as 500 jobs as profits continue to fall.

Reporting an 83 per cent dive if profits for the first half of the financial year, the carrier also confirmed it would cut international routes as it sought to rebuild its strength.

Chief executive Alan Joyce outlined plans to modernise maintenance services departments in order to adapt to the latest aircraft technology,

The role of three Australian heavy maintenance bases will come under review, with many job losses expected in this sector.

“Today Qantas engineering services costs are at least 30 per cent higher than those of our competitors,” Joyce explained, “and we have the ability to change.”

The move will further sour relations with trade unions angered by 1,000 job losses announced last year as part of a plan to set up a premium subsidiary carrier in Malaysia.

Qantas employs about 36,000 people.

Net profits at the oneworld carrier for the six months to December 31st fell to $42 million, from $241 million a year earlier, amid soaring jet-fuel costs.

Industrial action by unions, prompting the temporary grounding of its global fleet in late October, also took a toll on the airline.

Underlying pre-tax profit fell to $202 million, beating the Qantas guidance of $140 million to $190 million.

The full text of Alan Joyce’s speech can be seen here.