Qantas Airways, Australias largest carrier, will split its main flying unit into domestic and international businesses as it deals with rising fuel prices and losses on long-haul routes.

The split will help in turning around the international business, the firm said.

The airline, whose international arm lost about A$200 million (€155 million) in the year through June 2011, yesterday announced it will cut about 10 per cent of its engineering staff by closing one of its three heavy maintenance bases in Australia with the loss of 500 workers.

Fuel prices that have risen 50 per cent over the past two years and rising competition from Middle-Eastern rivals mean Qantas must limit losses on its long-haul services. The airline has already cut back unprofitable international routes, retired older aircraft and is seeking to establish a new premium carrier in Southeast Asia to tap rising demand in the region.

Simon Hickey will become chief executive officer of the international division from July 1st.