Canberra-based Airservices Australia has offered 600 redundancy packages to corporate and back-of-office staff in a bid to drastically cut operating costs and address declining profitability.
But more than 600 staff have already applied for the packages, with union officials and senior Airservices management acknowledging declining workforce morale under difficult circumstances.
In a letter to staff, chief executive Jason Harfield said those working in operational roles such as air traffic controllers and rescue firefighters could not apply for a redundancy, with applications to be finalised by August 8.
Mr Harfield told The Canberra Times the job losses would be spread across major cities, although union officials fear the total job losses in Canberra could pass 200.
"I completely and utterly understand the difficulty and uncertainty this creates for staff and this is why we want to progress through this as quickly as possible," Mr Harfield said. "The longer we leave it, the longer the uncertainty lasts."
Airservices Australia's profitability fell by 90 per cent from $45.5 million in 2013 to $4.5 million in 2015.
The group is expected to post its first financial loss of $13.6 million this year and hopes to slash $100 million from its cost base in coming years.
Mr Harfield said the agency's staff ranks had grown by 6-7 per cent in recent years despite operational staff levels remaining stable.
"All our revenue comes from the airline industry, so it was not going to go down well for us to put up our prices when there is a view we are inefficient," he said.
"Our previous operating model served us well, but it became unsustainable. Now we are focusing on what we were chartered to do; aviation control, rescue safety and firefighting."
Mr Hatfield, who would not rule out further job losses, said many older workers and those with transferable skills had applied for a redundancy package.
"We have spent a lot of time explaining the reasons why we have to change to our staff and no one really disputes that, so some of the uptake [for voluntary redundancies] is from people who have transportable skills."
Community and Public Sector Union deputy national president Rupert Evans said he was concerned staffing was being determined by profitability.
"The fact that Airservices Australia has received so many expressions of interest from staff wanting to take a voluntary redundancy shows that morale has hit rock bottom," he said.
Mr Evans also raised concerns the restructure was a precursor to privatisation. The claim was strongly denied by Mr Harfield.
"This [restructure] has nothing to do with the ownership model of this organisation and it is not being done to set it up for privitisation," he said.
Mr Harfield said the restructure was designed to ensure a return to profitability and to maintain a pricing index that provided value to the aviation industry.
The restructure comes before the implementation of the $1.5 billion OneSKY program, which will combine civilian and military navigation systems by 2021.
Airservices Australia employs more than 4400 staff and manages 11 per cent of the world's airspace.