Excellent post wunwing.
I'm interested that some have chosen the auto manufacturing sector as a comparison. Yes subsequent govts have poured money into the sector, but it's hardly for the industry to "stay competitive" but rather to stay afloat. Let's not forget political expediency either!!
Talk to anyone in the know in that sector here in OZ and there has been more non-production days over the last few years despite ACIS and the "green car fund" providing millions.
The biggest "killer" in my opinion to the industry was the tariff reductions. But consumer power is often what govts will look at in my policy decisions like this.
Where its not tariff barriers there are free trade agreements, bi-lateral or multi-lateral deals. It all starts to get complex very quickly....
As for aviation, there is the Chicago convention, the 'free skies' between OZ and NZ and overaching govt policy on aviation which suggests competitiveness and "safety" are the dominant parameters.
At the end of the day when it comes to "outsourcing" ultimately it's govt policy and legislation which sets the parameters. Whether we like what QF have done, ultimately if there is an environment where creating low cost carriers and employing foreign based crew to fly into OZ is legally allowed then ultimately it's the parameters that need to change.