And simplistically, the cost per ASK (available seat-km) can be scaled up to average fare by dividing by the load factor. At an assumed system-wide load factor of 70%, the Qantas 10.3 cents per ASK changes to 14.7 cents per RPK (revenue passenger-km). That pays for operating costs.
I wonder how much has to be added to the operating costs for head office, travel agent commissions, profit and marketing. And of course the airport charges and taxes come on top. Going Boeing tipped us off to Ben Sandiland's article in Aircraft & Aerospace magazine, and I'll go buy it to see how he has handled this.
At the least, I suggest adding 25% to the RPK, bringing up the average fare to 18.4 cents before airport charges. For SYD-MEL, 706km distance plus another 45km track kms for routing, that is approximately 750km, and it suggests they should charge an average fare of $138 one way.
Now the SYD-MEL route is a premium route, and it earns more than average, especially when the business people have to fly. So the fares charged will be higher than $138. The fares for 7th May morning one way SYD-MEL Qantas were $112, 190, 314, and $500 business. Based on a typical 737-400 configuration, and 75% load factor (the morning flights are fuller), that is 14.9c/km, 25.3, 45.5 for economy, and 66.7c/km for business class. The average fare over the whole plane is 30.2 cents per km, based on my RM assumptions. I don't envy Qantas the extra fare – it only goes to offset losing flights elsewhere.
Going Boeing noted that DJ were worried if a QF A330 was on the route. The A330 wouldn't have to be too full at an average fare of 30.2 cents/km before the whole flight was paid for. After filling enough seats at the above fares to pay for the flight, that would leave about 140 seats in economy empty. These can be marginally costed (that's economist talk for fire-sale). Let's assume $7.50 per passenger catering marginal cost, plus another $7.50 for ticketing (if not web specials) – say $15 actual cost. QF can throw these seats into the marketplace at anything from $15 upwards and make money. The parallel DJ flight would be looking a bit empty if DJ was still selling seats at their 7th May normal range of $99-199.