I think you will find that Australian did not add much capacity when they took over Osaka, Nagoya and Fukuoka from Qantas. They went from 2 class 767's and 747's to something like a one class 270 seater 767s. SARS and a couple of other issues led to the demise of Australian. My memory may be failing but I think the Japanese market was def showing signs of decline at that time.
AO operated from Oct 2002 to Jun 2006, (SARs occurred from Nov 2002 to Jul 2003).
If we take International services ex CNS pax numbers grew from 723,000 in FY01/02, 754,000 in FY02/03, 791,000 in FY03/04, 857,000 in 04/05, and again 857,000 in 05/06, but then the dollar and falling Japanese economy kicked in with pax declining to 763,000 in FY06/07 and bottoming out in 09/10 in 469,000. (source BITRE).
I think you will find the growth between 2001/2002 and 2003/04 was directly the result of increased capacity by AO of about 10-15% on routes to Japan from CNS. I seem to recall not only did the seating density increase on the 763s but also additional frequency..
SARs had nothing to do with the demise of AO, the problem was that AO offered nothing that QF could not offer. It simply added a new brand into the market and had an unsustainable cost base spread over a small operation.
By the time Qantas realised AO was not viable their loads were peaking. The fall in forward Japanese bookings just made the decision to axe it all the more urgent.
Just highlights that lessons of the past have still not been learnt.