Up to 1750 Qantas workers are expected to lose their jobs over the next few months, though not in New Zealand.
The airline has slashed its profit forecast by more than half because of the global financial crisis.
Qantas has already cut 1500 positions since July last year, and in March it culled 90 senior management positions as well.
Now it says that another 500 management positions must go, and that up to 1250 equivalent full-time jobs will be affected by capacity reductions.
Chief executive Alan Joyce says, however, that the cuts will not affect the level of customer service.
Qantas reduced its full year pre-tax profit outlook to $A100 - $A200 million, down from its previous forecast of $A500 million.
The airline also said it would reduce capital expenditure by at least $A800 million in 2009/10, defer aircraft orders, including four Airbus A380s and 12 Boeing 737-800 aircraft and reduce capacity by a further 5%.
It will ground the equivalent of 10 aircraft and make them available for sale.
In February, Qantas reported a 66% drop in first half net profit to $A210 million compared to the prior first half.
Business-class services hit hardest
Mr Joyce said said that most of the 1250 jobs to be affected by capacity reductions would be in Australia: "No more changes in New Zealand, those changes have already been made."
The airline's domestic New Zealand operation is being restructured following its decision to handover to its low-cost subsidiary, Jetstar, later this year.
The company says it is not yet clear whether trans-Tasman flights or associated jobs will be affected.
Staff reductions would be concentrated in Qantas's international business-class services, where the airline has experienced the greatest decline in demand for air travel.
Mr Joyce said Qantas wanted to avoid redundancies wherever possible, so it would try to use a range of initiatives to manage the downturn, such as annual leave, long-service leave, attrition, redeployment, leave without pay, part-time work and job-sharing.