Qantas is being urged to cut thousands more jobs and jettison a majority of its international routes as the company faces the most turbulent period in its 94-year history.
The struggling airline will reveal its full-year results on Thursday with analysts forecasting a pre-tax underlying loss in excess of $750 million, and a bottom-line loss that surpasses $1 billion.
Such a result would be the worst in Qantas' history as a public company and comes after it earlier this year announced plans to axe 5000 jobs over three years as part of a savings drive and restructure program.
But Shaw Stockbroking analyst David Fraser says the planned job cuts do not go far enough, and warns the company will have to axe another 2000 staff if it is to turn its fortunes around.
"Until we see the details of the result it's pretty hard to work out what they're going to do going forward but I suggest that the international operations are going to continue to be impacted," Mr Fraser said.
"The people who are buying this stock are working on the theory that in three years time they'll have turned it around and effectively Qantas will have turned itself into a Virgin lookalike."
Qantas chief financial officer Gareth Evans has already revealed about $1 billion of $2 billion in savings would come from its international division.
Former Ansett executive Neil Hansford says he suspects the international business alone is racking up losses of $800 million a year, although will likely be disguised by profits booked by the domestic arm.
Mr Hansford, now an analyst with Strategic Aviation Solutions, has warned that unless Qantas addresses "poor fleet management" and slashes international routes, the Flying Kangaroo will go the way of Ansett, which collapsed in 2002.
Qantas still had too many different types of aircraft, Mr Hansford said, as well as an ailing and costly fleet of more than a dozen 747s.
"Ansett's biggest failing was it had too many aircraft types," Mr Hansford said, adding that the "there's only one place for a 747 and that's in the desert being broken up".
He said Qantas' domestic business, where the carrier has more than 60 per cent market share, was strong but that the airline should massively cut back on its international routes, including flying just once daily to London and Los Angeles out of Sydney and Melbourne.
Services to South Africa and South America should be axed completely, he said.
"If they stay in the international as it is, if they think they can stay in the international business with the route structure they have, and try to save their way to prosperity, there will be no turn-around," Mr Hansford said.