I think it was the only option Joyce had and a very brave move. It might just have saved Qantas.
As a Swede on onlooker from abroad, I can only draw parallels to the Scandinavian carrier SAS. Go back 30 years and SAS was a truly intercontinental airline with daily flights to South America, Asia, the US and everywhere you can imagine in Europe, running their DC8's, DC9's, DC10's and 747's. Fuelled on by the good times and the self love of all the 'Best Airline Of The Year' awards they picked up like candy in the 80's, the staff and the unions got big heads and started to demand ever greater perks and less working hours. They completely ignored any outside factors such as recessions, competition, changing demographics etc and plodded merrily on with their requests and still do.
Every year over the last 20 years, there has been some kind of union disruption and "slow bake", designed to interrupt as much as possible until they get what they want. And like all union action, it's us, the travellers, the third party that suffers. This is of course the whole idea. And because SAS is co-owned by the governments of Norway, Sweden and Denmark, semi-socialist, the hardest hitting union, the Danish one, has been allowed to set the agenda. This has resulted in SAS being literally obliterated in Sweden and Norway when it comes to intercontinental travel. The Danish unions decided that Kastrup is the hub and that was that, so now the antiquated hub system of the 70s' in full force - you can't travel anywhere without changing planes at Kastrup. And as airline travel is today, people simply won't do it and chose other alternatives.
The result is that SAS is today a sad, sad shadow of its former self. Constantly bankrupt, the governments have to chip in every year to keep it afloat. The pilots and cabin crew have ridiculous pay for the amounts they work - higher than any other airline in the world, I think. They don't fly anywhere you want to go and if they do, you have to change planes in Kastrup when all the competitors go direct. And because of labour unions, the cabin crew is 55+ years old, have been doing it for too long and subsequently hate their customers - they smile at you through gritted teeth and are sarcastic. Virtually all the intercontinental lines are dropped and they're desperately hanging on to a few profitable Euro runs. The MD80's are well over 20 years past their prime but they're so skint they can't even afford to replace them with even 10 year old aircraft. It's a mess.
Now, new companies are moving in, making inroads and soon there won't be a SAS when the governments hit recession and don't fancy feeding the monster to the tune of 6 billion each year. It's a tragic set of events, and we Scandinavians were as proud of SAS as you are of Qantas. SAS used to be the benchmark, the clean, minimalist, good service, high quality Scandinavian alternative for international travel.
Everyone here knows who's to blame - unions that refuse to move with the times.
A slow SAS death is not something you should want for Qantas and therefore I think Alan Joyce did the right thing. He brought it to a head and for good or bad, something new will arise from that and positions will move. His job is to save Qantas in the long run, and all the other options were designed to do the opposite. Maybe not immediately, but the 'slow bake' would have killed it eventually, you can be sure of that.