And therein lies the ultimate problem: the nature of the Australian business environment simply does not allow a local airline to compete effectively in an international market.
There are lots of reasons: employee costs are one, as is taxation (individual and company), the regulatory environment, business legacy, social normalisation... Unfortunately, these factors lead to a strategy to segment and offshore.
You'd better tell that to the German auto manufacturers then, they have a far higher cost of operation than any Australian operation yet it seems they have yet to be told of how bad they should be doing!
I'd suggest a slight amendment to your statement: the nature of the Australian business environment simply does not allow a local airline to compete effectively in an international market
based on price alone. That doesn't mean businesses can't compete, and be highly profitable in doing so. German manufacturers realised a long time ago they were never going to be able to compete on price alone, hence they have focussed on
value ie offering premium products but charging premium prices for them; that represents better value to the consumer. Qantas was perfectly poised to position itself as a premium carrier that also represented value to an increasingly large segment of the market that buys on value and not merely price, particularly given Jetstar was able to fulfil the price sensitive end of the market. A win win situation if ever there was one. Instead years of disgraceful management, senseless "cost cutting" and manipulating the group such that it is a better take-over target has all but killed any premium aspirations the brand may have aspire to.