How can Germany, with it's relatively small domestic market and high labour costs, support so many profitable vehicle manufacturers?
I can answer that one I think.
Because the population of Europe in 2009 was somewhere around 850 million people. All within a short (by Oz standards) travel time of the German factories.
Secondly and this relates more directly to the airline world, Germans as a population and specifically as manufacturers have a reputation for very high standards. Therefore the consumer feels confident about the product. Much like buying a ticket on a trusted carrier compared to an unknown SE Asian carrier.
This is where the analogy gets interesting. I bought a Bosch washing machine due to a price vs quality comparison. When I looked carefully I discovered it was asembled in Thailand!
Why must Qantas move off shore to access lower labour costs when other western world airlines (AIG, Southwest Airlines), with similar labour costs, are profitable?
A very good question. As has been said elsewhere if the pilots and cabin crew took a 50% pay cut it would not help the route structure issues, the poor IFE and the old airframes.