ASydney court heard on Monday that Australia's flag carrier Qantas was just eight weeks away from running out of money due to massive losses incurred in the wake of the coronavirus pandemic.

The airline was taken to the Federal Court by the Australian Licensed Aircraft Engineers Association, which has challenged the legality of terminating about 450 Qantas and Jetstar maintenance engineers, ABC said in a news report.

They were among two-thirds of the workforce who were sacked without pay as passenger numbers plummeted in mid-March during the early days of the pandemic.

Appearing for the flag carrier, barrister Rowena Orr told the court: "By late March this year, the Qantas group had formed the view that if they continued to operate their regularly scheduled flights, the group would have exhausted its existing cash reserves within a period of eight to 10 weeks."

By the time Qantas made the decision to stand down workers, every other "cost-saving measure" had been explored and implemented, she added.

"The alternative was to continue conducting flights with no, or very few, passengers in the hope that conditions for air travel would return to normal which, of course, has not proven to be the case.

"It would ultimately have put at risk the jobs of all of the group's employees," the barrister was quoted as saying by the ABC.

Last month, the flag carrier had announced another 2,500 job cuts as it plans to outsource ground handling services at major airports.

The announcement followed a statutory loss of A$2.7 billion ($1.94 billion) for the Group in FY20, and a revenue drop of A$4 billion in the second half due to the health crisis and border restrictions.

The airline had already flagged 6,000 job losses in June in a bid to cut costs amid the ongoing Covid-19 pandemic.