Qantas chief executive Alan Joyce says the airline is axing 500 jobs and reviewing hundreds of maintenance positions after reporting a sharp fall in first-half profit.

The airline made $42 million in the six months to the end of December, down 83 per cent on the $241 million it made a year earlier, which the company blamed on industrial action last year which forced the grounding of the entire fleet.

Qantas says the impact of lost passenger revenues and forward bookings prior to the grounding cost the airline $95 million, while the direct impact of the grounding cost $70 million.

Mr Joyce announced a five-year plan involving changes in engineering, maintenance and ground handling services to make the airline more "globally competitive".

Qantas also announced it would cut its Sydney-Mumbai and Auckland-LA routes from May 2012.