If Australian airlines had a convenient route structure and service that was good I would make a huge effort to fly Australian every single time.
But I'm buggered if I am going to pay extra for crap service, crap routes, old planes. Forget it. I am never going to fly Jetstar - ever. Run a decent full service airline and they wouldn't need subsidies because you would have customers. When Managers seem to not care about service, pilots, staff and maintenance - I'm gone - you have nothing left. I don't care one bit about your profits and I don't care about frequent flyer miles - profits will come naturally when you do a good job.
Welcome to the crap world of globalization. (I do admit that VA are getting there with the Etihad connections.)