Alan's cost reduction strategy is nothing new.
He's following Geoff Dixons strategy that didn't work anyway.
Lets cast our minds back to Geoff Dixon's 5 year 'Sustainable Future Program'.
The year is 2006, GD announced a plan to ensure the future success of the Qantas Group.
Australian Airlines (Cairns) was still operating a Jetstar with a small domestic fleet was yet to expand Internationally.
Qantas mainline held 31% of International market share.
Jet fuel prices where high & the airlines fuel costs where up $1.1 Billion on the previous year, an increase of 45%. An increase of $1.1 Billion in fuel costs was also forecast for the next full year.
Qantas had yet taken delivery of its first A380. However GD had declared it was the "optimum aircraft for hub flying"
The Chairwomen Margaret Jackson had stated the "fundamentals were strong" although there had been a 30% decrease in profit since the previous year. She would also go on to declare we have "the right aircraft for the future"
Jackson would also highlight the issues facing Qantas as an "end of the line carrier" & the immense pressure from expanding Asian & Middle Eastern Carriers.
The company was also sitting on $2.9 Billion in the bank.
Dixon's plan would see costs reduced by $1.5 Billion over the following 5 years.
Dixon had just reduced costs by $501 Million over the previous year. He'd been busy 'transforming' the engineering business into "worlds best practice efficiency"
Business segmentation was Dixon's plan. Each business unit would operate as individual silos to further reduce costs within the business. These individual businesses would allow greater transparency & clarity for each unit. Dixon would further declare each business unit must "stand on its own".
The 'Sustainable Future Program' would see the introduction and aggressive growth of Jetstar International.
A further reduction of 1000 staff numbers, there had already been 1250 management positions axed the previous year. The program would ensure the remaining 37,000 jobs at Qantas were protected.
The domestic dominance would be maintained with an aggressive focus on market share.
Qantas would pursue opportunities in Asia in the LCC market, which we would later see as Red Q and the expanding Jetstar franchises.
Where am I going with this?
Qantas has experienced a disastrous strategy over nearly 10 years.
A sustainable future program has done nothing but shrink the core airline business in the pursuit of fortunes elsewhere.
Joyce's structural review is nothing new. Its the same strategies used by Dixon. Axe staff, transform the business to worlds best efficiency practice, reduce costs and talk up the performance of the management and board.
Dixon & Jackson flagged high fuel prices, foreign competitors & end of the line carrier issues 8 years ago.
They have had 8 years to fix these issues and still nothing is done.