Qantas is cancelling some domestic routes and reducing services due to rising fuel prices.

The airline will exit its Gold Coast-Sydney and Ayers Rock-Melbourne routes and reduce its Ayres Rock to Sydney services from August. Jetstar will exit its Sydney-Whitsunday Coast, Adelaide-Sunshine Coast and Brisbane-Hobart routes from July.

Qantas said it was finalising details of changes to its international network and will announce these in the next week.

The airline is also grounding two aircraft, retiring two early and cancelling the delivery of another. The changes will mean job cuts, starting with voluntary redundancies.

Qantas chief executive Geoff Dixon said the airline’s fuel bill would increase by more than $2 billion in 2008/09.

“The fact is that fuel prices are something we have no control over, so we have to look harder at areas where we do have control,” he said.

“Wherever possible, we have tried to minimise the overall impact of the changes.”