Air fares between Auckland and Los Angeles are expected to rise after Qantas announced it would axe its service from May, handing Air New Zealand a monopoly on the route.

As of May 6, Qantas will cut the Auckland-LA and Singapore-Mumbai routes, in addition to previously announced withdrawals from Hong Kong-London and Bangkok-London.

The Australian national carrier has also announced it would also reduce capacity on the ultra competitive Auckland to Sydney route by replacing the current Airbus A330 wide body service with smaller, single aisle Boeing 737-800s.

House Travel retail director Brent Thomas said the decision was surprising, given the strong demand from New Zealand travellers to the United States.

However, demand from the United States was weak.

Air New Zealand and Qantas have been competing vigorously on the route, with return fares of around $1700 in May.

''The consumer misses out if there is not that competition, that is the concern that we would have,'' Thomas said.

Air New Zealand also offers services to San Francisco and Vancouver, Canada.

Air New Zealand is conducting a review of its own long haul network, which was losing $1 million a week last year.

Qantas chief executive Alan Joyce did not give any reasons for the changes when he announced the airline's half year result today.

However, Joyce did say that Qantas would add A330 to its Australian domestic trans-continental routes.

The airline is also slashing jobs.

"We anticipate there will be 500 positions affected by the immediate changes that we have announced today," Joyce said. "The jobs that are going have become structurally redundant."

Qantas reported an 83 per cent fall in net profit to A$42 million ($54 million) for the six months to the end of December, blaming a A$194m cost from industrial action and the grounding of its fleet, and a A$444m increase in fuel prices.

However, a 52 per cent fall in underlying profit before tax for the half to A$202m was better than analysts had expected. Revenue rose 5 per cent to A$8 billion.

The underlying result also beat Qantas's earlier guidance for between A$140m and A$190m in underlying pre-tax profits.

Qantas has an aircraft engineering base at Melbourne's Tullamarine Airport, employing about 400 workers who conduct maintenance on its large Boeing 737 fleet. It also has a base at the Lindsay Fox-owned Avalon Airport near Geelong, providing heavy maintenance for the Boeing 747-400 jumbo fleet.

The Avalon base, employing more than 600 engineers and other workers, has been in operation since the late 1990s, while its other heavy maintenance operation is in Brisbane. The latter has about 400 workers.

Qantas also said it won't pay a dividend for the half.

- Roeland van den Bergh/BusinessDay.co.nz and Matt O'Sullivan/Sydney Morning Herald