As Australia¡¯s flag carrier suffers amidst mounting costs and unprofitability on international routes, Qantas CEO Alan Joyce has told lawmakers the airline must ¡°adapt or die¡± given the company¡¯s dire circumstances.

Qantas' share price dropped 36 percent in the past 12 months, due to a substantial AU$600 million in rising fuel costs and fierce competition from rival carriers in China and the Middle East.

The airline reported its lowest investment grade on January 31, according to Moody¡¯s Investors Service.

¡°They either have to come up with a business plan with costs close to their competitors¡¯ or they just slowly contract,¡± said Andrew Sisson, managing director of Franklin Resources Inc. (BEN)¡¯s Balanced Equity Management, Qantas¡¯s primary shareholder.

In the wake of the airline¡¯s crisis, Australian Licensed Aircraft Engineers Association federal secretary Steve Purvinas suggested Qantas may sack a high number of engineers in the near future.

¡°It wouldn't surprise me that Qantas would shed hundreds of jobs which seems to be their style of management rather than harnessing the quality product that we produce here in Australia,¡± Mr Purvinas said.

Qantas is in the process of reducing flights to Europe and shifting its focus toward the growing South East Asian market, planning to birth a new airline in either Malaysia or Singapore.

¡°If you can fly people to Kuala Lumpur or Singapore you¡¯ve at least got a natural market to draw on, but they won¡¯t fly on you if you¡¯re not price competitive,¡± Mr Sisson said.