Gaunty, there is a law in this country about "predatory pricing" - being one of the tactics firms with market power are not allowed to use.
Simply put, the law states that if you have substantial market power, you are not allowed to sell goods and services at less than the cost of their production as a tactic to undercut a competitor's prices.
If Qantas does decide to "match" Ozjet, I think a few injunctions might start flying about rather quickly.
I suspect that the reason he is using an old aircraft is to make it as bleedin' obvious as possible to the ACCC that the only way Qantas could be matching his prices is by predatory pricing.