An aviation analyst says Qantas faces tough times ahead, particularly on its home turf as Air New Zealand makes inroads into the Australian domestic market.
Qantas reported an 83% fall in its half year profit, prompting the carrier to axe 500 jobs and its unprofitable Auckland to Los Angeles route from May.
Within hours after the announcement, Air New Zealand issued a statement saying it plans to boost its capacity on the same route.
But the airline, which currently operates 12 direct services each week, declined to comment further saying it didn't yet have the detail on how and when it would add the extra capacity.
Air New Zealand says it has no intention of raising airfares as a result of Qantas' withdrawal, and it will continue to offer deals to LA on its grabaseat website.
Independent aviation commentator Peter Clark says he believes Qantas will also start feeling the heat on its home turf as Air New Zealand makes inroads with its Virgin Blue partnership.
He says Qantas will have to work hard to be innovative and to regain public acceptance after all the problems it's had.