Captain Sherm,
It's all very well to spout economics, however, in the Australian environment you can work for Virgin, Jetstar or Qantas (and now perhaps Tiger) and thats IT.
It's not an easy matter to take your bat and ball and go elsewhere if you don't like Jetstar terms and condition, as you imply.
Correspondingly for the airlines its not an easy matter to hire new staff either.
These considerations make the negotiations over pay and conditions slightly incestuous.