Qantas Group reported a first-half fiscal year 2014 net loss of A$235 million ($208 million), a A$346 million plunge from the A$111 million profit Qantas posted in the year-ago period. The Group’s first half ended Dec. 31, 2013.

First-half revenue was A$7.9 billion, down 4% compared to the year-ago period.

For the first half, Qantas Domestic reported underlying EBIT of A$57 million, a 73.9% drop from the Group domestic carrier’s A$218 profit during the year-ago period.

Qantas International posted an underlying EBIT loss of A$262 million in the first half, nearly tripling the A$91 loss the Group posted for its international carrier in first-half 2013.

Qantas subsidiary Jetstar reported an underlying EBIT loss of A$16 million, down from the A$128 million profit posted by the Group’s low-cost carrier in first-half 2013.

Qantas Freight posted underlying EBIT of A$11 million, down 50% from the A$22 million profit posted in first-half 2013.

“We are facing some of the toughest conditions Qantas has ever seen,” Qantas CEO Alan Joyce said. “Australia has been hit by a giant wave of international airline capacity … the Australian domestic market has been distorted by current Australian aviation policy, which allows Virgin Australia to be majority-owned by three foreign-backed airlines and yet retain access to Australian bilateral flying rights.”

Concurrent with the release of its financial results, the Group announced the initial details of an immediate A$2 billion cost-reduction program, including plans to defer or sell more than 50 aircraft and eliminate 5,000 full-time equivalent positions by FY17.

“With structural economic changes being exacerbated by the uneven playing field in domestic aviation, we must now take actions that are unprecedented in scope and depth,” Joyce said.