Qantas says there will be some cuts to services because of the global financial crisis.
Australia's national airline expects its pre-tax profit to be about $A500 million for the year to June 2009, down from an earlier predicted $A751 million.
While Qantas says it has benefited from the recent fall in fuel prices, this has been offset by the global economic slowdown and reduced demand since September.
Qantas chief executive officer Geoff Dixon says the airline will not take up the planned lease of two new aircraft.
It will cut back on the use of its planes, reducing its overall capacity to the equivalent of grounding 10 aircraft and also hold all planned growth in the domestic market for Qantas and JetStar.
Mr Dixon says there will be no change to the company's plans to cut 1500 jobs, annoucned earlier this year.