Reggie,
Australian Airlines, whilst crewed by ex-mainline pilots, is operated under a completely different Award and some pilots (I'm sure) would argue that conditions HAVE been eroded relative to the mainline conditions. Also, wages have been comparitively reduced relative to the wages in QF mainline.
So what has happened with the initial intake of pilots, is that those who were junior in mainline, have accepted positions in Australian that gives them a RELATIVE payrise compared to what they would be making in mainline. They also do not have to endure the lot of a junior rotating pilot on the 767.
Australian Airlines was set up with a target of operating 30% cheaper than QF mainline. This has been achieved by comparitively reduced wages (pilots and new-hire cabin crew) and all-economy service.
In a way, I hope that the Australian experiment does not work, so that current QF management realise what good value their current workforce represents. For all the naysayers, I would say that the current value of the OZ dollar, and the productivity measures that have been given to QF over the last 10 years means that QF mainline aircrew (compared to their peers in equivalent airlines) are probably the most cost-effective workforce in the world.