SYDNEY (AFP) - Qantas will cut 1,500 jobs around the world as the Australian carrier seeks to combat the rising price of oil and challenging market conditions, chief executive Geoff Dixon said Friday.

The airline has also cancelled plans to hire 1,200 staff and has reduced its forecast capacity growth for 2008-2009 from 8.0 percent to zero. Qantas will also retire up to 22 older aircraft from its fleet.

"The jobs to be cut will be principally concentrated in non-operational areas, although operational positions will also go," he said. "Over 20 percent of our management and head office support jobs will be cut."

Dixon said the aviation industry was facing a crisis worldwide due to the volatility in the price of oil, which last week soared to record highs above 147 dollars per barrel.

He said that by acting now, Qantas was protecting its competitive position and the majority of its 36,000 jobs, and was enabling the company to "grow profitably when conditions improve."

In addition to the job cuts, which would come into effect by December, a recruitment and executive pay freeze would remain in place indefinitely, he said.

Included in the job losses would be 99 workers from long-running call centres in London and Tucson, Arizona.

Despite retiring the older aircraft from its fleet of 228, Qantas would press ahead with the introduction of new and more fuel efficient aircraft such as the Airbus A380 and the Boeing B787.

He said Qantas was conscious of the role it played in business and tourism in Australia when it reviewed its flight schedules.

"We will, for example, proceed with opening up already announced new direct services between Sydney and Buenos Aires in November."

Fuel accounts for about 35 percent of the airline's expenses -- a cost Qantas said in May would increase by more than 2 billion dollars in 2008-2009.

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