geography (and population) favors New Zealand even less, yet they seem to be able to support a progressive national carrier with a modern fleet
Because Air New Zealand is an actual "flag/national carrier", in other words, an airline that is backed by the government for the good of the citizens of the country. QF is 100% privatised yet it has a significant drag factor called The Qantas Sale Act. It seems that every Australian government since QF was privatised has seen fit to call QF a 'national carrier', presumably because the government is involved by way of the QSA.
We all need to face facts: QF is no more a national carrier than VA, TT, JQ or Rex. They have no backing from the government and, in fact, are hamstrung by the terms of the QSA, something not binding on those other airlines. They should be either cut loose from the QSA entirely to sell out to whomever they choose, with the loss of net income to overseas entities (but perhaps keeping jobs here in Australia) or ALL other airlines in Australia need to bound by the same legislation that QF is.
Yes AJ and the board have a lot to answer for, the unions have a lot to answer for. But I would counter that, most of all, the governments from the days of the QSA until now, have a lot to answer for, for presuming that QF would be capable of operating like a government-backed national carrier, without any actual government backing.
Cheers,
John