Australia’s Largest airline, Qantas Airways, said Tuesday it would cut 1750 job due to the current in the economic crisis, as S&P cuts its rating from BBB+ to BBB.

The carrier may have a pretax loss of as much as A$188 million ($137 million), according to figures derived from the Sydney-based airline’s full-year forecast today and confirmed by the company.

Analyst said the severity of the earnings downgrade was likely to have surprised investors.

“While surprised by the depth of the change, we do believe management's restructuring will better position the business to address the current conditions as well as the longer-term challenges from international competition,” Credit Suisse analyst Anthony Moulder said.

Demands, particularly on international services are slowing, forcing cuts to about 5 per cent of its workforce as well deferrals of orders for four A380 super-jumbo aircraft, said Alan Joyce, the Qantas chief executive.

It had slashed also its guidance and sees second quarter loss of A$100 million ($124 million) from A$200 million in year over year, down from A$500 million earning expectations, a 66 percent loss on the first quarter seeks to pay its debt to save.

Merrill Lynch analyst Kevin O'Connor also expect Qantas' financial performance will improve significantly in 2009 or 2010 as the benefit of cost and a capacity cut starts to flow through, as it takes the actions aggressively.”

International carriers such as British Airways and Virgin Atlantic are also cutting seats and jobs in a bid to conserve profits.

Shares fell 5 cent to 2.50 percent at $1.95 I the Australian Stock exchange.