My goodness, there's so many things wrong with that article I don't know where to start.
At least there's another explanation of what has been wrong with QF this past decade with muppets like these running the show.
About the only thing you save by reducing capacity is fuel. Most other costs are fixed (leases, staff, infrastructure etc) so all you achieve is to increase the cost of your remaining ASKs.
The implied irrationality argument doesn't wash either because your competitors are faced with the same rising fuel prices as yourself.
I'm surprised he didn't mention that B777's can't make money.