Australia's Qantas Airways plans to scale back some flights and cut management jobs to help offset soaring fuel prices and an estimated A$140 million ($144 million) hit to its earnings from a string of natural disasters in key markets.

Qantas shares rose on Wednesday after the airline announced a string of measures aimed at cutting costs and boosting revenues, including the suspension of some services from Australia to Japan and New Zealand.

Australia's biggest airline joined major U.S. airlines that last week announced capacity cutbacks to deal with the Japan disaster and higher oil prices. Many carriers have been steadily raising fares this year as $100-a-barrel oil threatens profits just as airlines are recovering from the global credit crisis.

Brent crude futures for May delivery rose 36 cents to settle at $115.16 on Tuesday as expectations for a swift restoration of Libyan oil to the market were reduced.

Qantas estimated the impact of Japan's earthquake and tsunami, last month's earthquake in New Zealand and recent floods and cyclones in Australia's Queensland state on second-half underlying pretax profit would be A$140 million.

Qantas shares were trading 1.9 percent firmer at A$2.19 by mid-afternoon on Wednesday, outperforming a 1.3 percent gain in the broader market <.AXJO>. The stock is still down more than 8 percent since the beginning of March after rising oil prices hurt airline stocks globally.

Australian rival Virgin Blue cut its earnings forecasts last week.

The stock has been sold down quite a bit so this is probably a bit of a relief. If all those fuel surcharges stick, it vindicates they are more diverse and probably have more pricing power than their competitors, said Brian Han, portfolio manager at Constellation Capital Management, which owns Qantas shares.

UNION STRIKE THREAT

Chief executive Alan Joyce said he was reviewing the airline's manpower costs with the aim of cutting management headcount and annual and long-service leave balances.

We want to limit redundancies wherever possible and will be using a range of initiatives to manage the reduction in capacity, including annual and long-service leave. At this stage only management positions will be made redundant, Joyce said in a statement.

Qantas' plan to target management jobs comes after unions threatened strike actions by some Qantas staff over outsourcing issues.

The airline did not give full-year earnings guidance, but said the potential impact on earnings in the second half included A$45 million from the Japan earthquake and tsunami, A$60 million from flooding in Australia's Queensland state, A$20 million from cyclones in Queensland and A$15 million from last month's earthquake in New Zealand.

Qantas said it planned to cut domestic capacity growth in the second half of the current financial year to 8 percent from 14 percent and international capacity growth to 7 percent from 10 percent.

The airline's low-cost subsidiary, Jetstar, will also suspend up to four weekly return services from Australia to Japan between April and August and suspend a Qantas service between Perth and Tokyo.

It will also reduce some services to New Zealand and retire early two Boeing-767 aircraft.

Analysts said Qantas was relatively well hedged compared to other carriers. The airline has hedged 96 percent of its remaining financial year 2011 fuel requirements and 35 percent for 2012, according to Royal Bank of Scotland, giving it significant short-term protection from further hikes in oil.

Qantas and Singapore Airlines said earlier this month they would raise fuel surcharges to offset higher oil prices, while Cathay Pacific <0293.HK> warned that growing energy costs could hurt its profits.

($1 = 0.972 Australian Dollars)

(Editing by Ed Davies and Matt Driskill)

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