On Thursday Joyce announced the airline would cut 6000 jobs, leave 15,000 staff on stand down and park its A380s in the low-humidity Mojave Desert in California for three years. Joyce is aiming for A$15 billion in cost savings over those three years and to permanently remove A$1b in costs.
When the airline resumes long-haul flights some time in 2022 it will be a much slimmed down version of itself which will be better positioned to survive in what is likely to remain a difficult environment for airlines for years to come.
Fortunately for Qantas shareholders and employees — at least those who still have their jobs — Joyce has successfully steered the airline through previous crises.
In the wake of the global financial crisis he cut the airline's annual costs by A$2b. It was a painful process that also involved sacking staff, but it put the airline on a profitable and sustainable footing, enabling it to face the Covid-19 crisis in a much stronger position than many other big name global airlines. Singapore Airlines and Lufthansa, for instance, have both needed government bailouts to survive.
Joyce has shown that he can make tough decisions that cause short-term pain for many but which will ensure the survival of the airline over the longer term.
Even with that experience behind him, he describes the current crisis as "the biggest shock" the aviation sector has ever suffered.
Joyce said his Covid recovery strategy was designed to get Qantas back to a "growth phase" by 2023, when the group hoped to again take delivery of new aircraft and return Project Sunrise flights, between Australia's east coast and cities like London and New York, to the agenda.
In the meantime, the airline's operations will very slowly return to normal.
Alan Joyce, chief executive officer of Qantas Airways. Photo / AP
Any significant volume of overseas flights has been put back for at least 12 months, with flights across the Tasman possibly the only exception.
All of the airline's widebody fleet remain grounded for up to 12-months, and in the case of Qantas' dozen A380s, for three years.
Even domestic travel will only be at about 70 per cent of pre-Covid capacity by the end of this year.
By June 2022, Qantas expects to have about 21,000 staff, down from about 30,000 before the crisis.
And all of this relies on any second waves of coronavirus being largely contained, be they in Australia or overseas.
Qantas also raised A$1.9b in cash from shareholders, which Joyce said would strengthen its balance sheet and speed its recovery. It's an indication the pandemic has been worse than the company expected given that, only a month ago, Joyce said the airline's cash reserves would see it through the disruption caused by Covid-19.
It's an acknowledgment that the course of the crisis — and hence of the lockdowns — is uncertain. No one knows if, when and where any second waves might strike and likewise, when a vaccine will be developed and life can return to normal, as opposed to not at all normal or nearly normal.
All this paints a picture of a shock to the travel sector that is much worse than initially feared.
It also suggests the effects on the broader economy might be much larger lasting than the V-shaped recovery many people are predicting.
The Qantas plan comes a day before US private equity fund Bain Capital bought Virgin Australia, after Covid-19 sent the company into administration.
Virgin Mark II will be much smaller than Qantas — with about five to six thousand employees when it resumes operation in September. The new owners plan to make it a "value" airline, which sounds as if Virgin will be looking for a niche between the full-service Qantas and Qantas' discount airline subsidiary Jetstar.
The relaunched Virgin will see Qantas all the more eager to maximise its share of the domestic market while international flights are in hibernation.
When the world emerges from the coronavirus pandemic, be it in one, two or three years, Qantas will be a stronger and leaner airline than many of its global competitors. It will also have deep pockets — A$4.6b of liquidity from capital raising and debt facilities — that will allow it to seize opportunities and enter markets which other struggling airlines will have to pass on.
In reshaping Qantas from a somewhat bloated and inefficient airline to one of the world's most profitable in the last few years, Joyce has demonstrated that he can lead a difficult and complex transformation project.
For all the pain he is causing now, Joyce is setting the airline up for a strong bounce back from the coronavirus crisis.
