Qantas Airways plans to set up two new Asia-focused airlines and cut up to 1000 jobs.
Qantas says it will launch a new, premium Asian airline as well as a Japanese low-cost carrier, jointly with Japan Airlines and Mitsubishi.
Qantas says up to 1000 jobs will be at risk from the shake-up, which involves the retirement of older planes and major changes to the international network.
The fleet changes involve the acquisition of between 106 and 110 Airbus A320 aircraft.
But Qantas pilots have vowed to fight against the company's plans to expand its offshore operations.
One thousand jobs in Australia will be cut as part of the restructure.
Qantas says the strategy will save the airline $A2.3 billion over five years.
But Pilots' Association spokesperson Nathan Safe says Qantas management is responsible for the poor performance of its international arm.
He says its competitors such as Cathay and Singapore are highly profitable airlines because they bought the right aircraft.
Mr Safe says Qantas mainline international is burdened with aircraft that are over 20 years old and the wrong aircraft for the routes that they fly.
He says if they had made the right aircraft choices years ago Qantas International could be a profitable airline today.
