The main thing the federal government would consider when deciding whether to grant Qantas its hoped-for loan guarantees, federal Transport Minister Warren Truss told the ABC this morning, was the market reaction to today’s first-half profit announcement. Well, the initial market reaction is in — and the thumbs are not up.

Qantas shares slumped more than 7% to $1.18 after it confirmed 5000 jobs would go over the next three years in a brutal $2 billion round of cost cuts designed to restore the airline to profitability.

Almost the only job that is secure at Qantas now appears to be that of Alan Joyce, who insisted he would remain as chief executive and had the full support of the board and management for his turnaround plan. “I’m absolutely committed to Qantas,” Joyce (pictured this morning) told analysts at the briefing in Sydney, who raised his future in the very first question after the presentation.

But job cuts would be felt across “every aspect of the business”, Joyce confirmed, including pilots and cabin crew, engineers and maintenance workers, catering, management and back-office staff.

Despite rampant speculation in the lead-up to this morning’s interim profit result, the restructure of Qantas remains a work in progress. There was no split of domestic and international, no sell-down of the frequent flyer program, not even a transfer of its Australian terminal assets — just a single deal in Brisbane garnering $112 million. There was not even a trading halt.

Instead, there was the deferral of new aircraft purchases, the early retirement of some (but not all) 747s, and the suspension of new investment into Jetstar Asia in Singapore.

The actual underlying loss before tax of $252 million was right at the better end of the $250-300 million range Qantas flagged last December. But analysts were concerned about the continuing poor performance of the struggling international business, despite Qantas’ partnership with Emirates, and Joyce declined to commit out the previously targeted return to profitability by the end of 2014-15.

Joyce — who will himself take a 3% pay cut this year — announced a company-wide pay freeze and said the airline would “not be contemplating bonuses … until Qantas is profitable again”.

Joyce defended his track record and continues to blame the “unlevel playing field” which allowed Virgin — majority owned by foreign, state-backed Singapore Airlines, Etihad and Air New Zealand, but still taking advantage of bilateral flying rights as if it was an Australian airline — to raise $300 million in capital last year and continue to engage in a loss-making capacity war with Qantas.

“Qantas can compete in any fair fight,” Joyce said, “but the impact of this unlevel playing field cannot be ignored.”

Joyce reiterated Qantas’ case for government assistance and said the airline could not wait for amendments to the Qantas Sale Act — to remove the cap on foreign ownership — which could take months or years given opposition from Labor, the Greens and Clive Palmer, who together will control the balance of power in the new Senate. “In the short term I don’t see any change [to the act],” he said, “but action is needed in the short-term.”

Qantas had its credit rating downgraded to junk status last year and is seeking to pay a fee, just as the banks did in the financial crisis, to make use of the government’s AAA credit rating.

Apart from the well-flagged cuts, Joyce hardly appears to have mapped out a new strategy at all, saying Qantas’ “guiding principles will not change” — safety first, dual-brand, Jetstar Asia, and so on.

Whether all that will be enough to satisfy the government remains to be seen. Meanwhile, the deep cuts will put Qantas on a collision course with the unions. Australian Services Union secretary Linda White has already warned the union will “fight for every job” and strike action must surely be a possibility. Qantas has scheduled meetings with key unions tomorrow.

Opposition Leader Bill Shorten again accused the government of failing to fight for jobs — describing the cuts as “truly devastating” — while Greens Deputy Leader Adam Bandt said the government should secure an agreement to protect local jobs and prevent offshoring.

Bandt also reiterated opposition to the watering down of the Qantas Sale Act: “What this means in reality is Qantas being sold off to airlines owned and backed by foreign governments like Emirates, Singapore Airlines and China Southern. Foreign governments want to own Qantas, but ours seemingly doesn’t.”