Qantas in Emirates' flight path

[Max Tow]

W_K raises an interesting point. Defence of an industry against foreign competition solely by matching costs has to be questionable, particularly in a business such as air transport where the "factory door" for what is produced is the same (i.e. in this case,the boarding gate at SYD or MEL). If labour costs were to be the sole arbiter, hypothetically and in extremis, an enslaved dictatorship could be the world's greatest producer of everything (or at least of all labour intensive services) unless the rest of the planet introduced similar work practices. I hasten to add that I'm not suggesting that the UAE or China or anywhere else currently operates in this way, but there is nevertheless a strong argument to say that whether it's motor cars or call centres, the genie of an allegedly free market can produce some interesting consequences.
To return to W_K's example, if Australia wishes to continue with a relatively high standard of living (pensions, healthcare, housing etc), just cutting real salaries or increasing hours clearly won't wash. Cutting waste rather than wages is a far better tack, but efficient working practices can soon be copied (e.g by giving a PC and training to a call centre wallah in Bangalore), so even that has limits.
In the UK, successive governments have taken a free market approach and "let it happen", hence there's no longer any significant shipbuilding,coal mining or home owned car making. The idea has been to spend the money encouraging new industry rather than pouring good after bad in propping up old ones. The French have taken the opposite approach, and defined "core" industries which are to be subsidised and maintained free from foreign competition or even foreign ownership. On balance, the former seems to produce the better performing economy, and in relative terms, the so called third world outsourcees will get richer as business is transferred to them. Maybe that is how it should be, as turning the Indian and Chinese masses into well paid, well educated and healthy consumers must be good for all of us. It will ultimately bring wage levels there closer to those we enjoy and perhaps even reduce the "poorer" countries' competitive edge (as has happened elsewhere to the formerly low wage Ireland). The challenge is to encourage their advancement without it being at the expense of economic havoc at home.
In this case, I would argue most strongly that Australia's particular geography and economic well being require a strong and locally committed long haul airline industry, and if that point is accepted, due allowance must be made for the tremendous competitive disadvantage of being at the end of the line and "hubless" like no other. The latter point fundamentally differentiates QF from the likes of BA in its ability to compete. I would also argue that competition with EK and SQ is NOT the operation of the free market, as it is to a significant degree distorted by the intertwining of state and industry and the linkage of supposedly independent suppliers in the latter two's home economies.
Aviation in Australia is not an industry past its sell-by date. It's something the country is good at and something the country needs.So don't allow it to be chiselled away without considering where it is that you wish the deregulation road to lead, and in the medium term, find an aircraft which will make the DXB and SIN stopovers as obsolete as Shannon and Wake Island.