Qantas chief executive Geoff Dixon, who last week announced the carrier would axe 1500 jobs from its global workforce, said the high cost of fuel would result in a "new aviation world order."

"Right now, airlines around the world are cutting routes and capacity, grounding and retiring aircraft and unfortunately shedding staff," Dixon told a business function in Sydney.

"It's likely that 100 000 jobs will be lost before the calendar year is out."

More than a shock or a blip

The Qantas chief — who has guided the airline through downturns sparked by crises such as SARS, the 9/11 attacks and the Iraq war in his eight years at the helm — said fuel costs were fundamentally changing the industry.

"The global aviation industry faces not just a shock or indeed a blip or indeed a crisis really but a permanent transformation," he said.

Dixon believed that the United States would eventually ease restrictions on foreigners owning more than 25 percent of the voting stock in US airlines, sparking a new wave of consolidation in the industry.

He predicted long-established airline brands would remain but that the number of airline owners in the market place would dwindle.

"We believe strongly at Qantas that over time, consolidation will transform aviation," he said.

"It will produce a few very large and extremely efficient global airlines with a portfolio of interests and a portfolio of brands — the brands won't go."

Dixon last week estimated rising fuel costs had added $2-billion to Qantas' fuel bill this year as he announced the 1500 job cuts and the abandonment of plans to hire another 1200 people.

Qantas also last week cut its estimated capacity growth for 2008-09 from eight percent to zero and announced it would retire up to 22 older aircraft from its fleet.

More airlines going bust

The aviation industry association IATA warned earlier in July that twenty-five airlines went bust or stopped operations in the first six months of this year and that more could fold as fuel prices soar.

The airlines no longer flying included big and small carriers from all regions, such as Cameroon Airlines, Denver-based Frontier Airlines and Britain-based business class airline Silverjet.

IATA said in March that business travel had contracted by the "largest amount seen since 2003." Business class contributes significantly to the revenues and profits earned by airlines.

Crude oil prices have soared in recent years, up from lows under $10 per barrel in the late 1990s to current levels of more than $130, making jet fuel much more expensive.

AFP