I guess it could only be subsidized by other parts of the Qantas group for so long.
That is so wrong. QF was making billion dollar profits. When making these profits, there was little incentive to extract much more efficiency from the workforce. Why upset the apple cart, risk strikes etc, when the money is pouring in.
We have seen it more recently in the mining industry, when the money is rolling in, efficiency takes a back seat and it's all about bringing in the money.
What QF did, was it didn't reinvest in new equipment to see it through the bad times. Instead it embarked on a new venture (Jetstar) as it saw this as the next big thing (which at the time it was, in Europe and beginning in SE Asia). So they starved mainline of investment to move into the low cost model.
As it turns out, times have changed again. Low Cost models are under real pressure (largely due do no barriers of entry because reputation, loyalty etc - it's all about ticket price, which keeps going down), whilst many full service carriers that did not take their eye off the ball, are reaping the rewards (BA, Delta etc etc). These airlines continue to be successful because they both reinvested and also maintained focus on workplace efficiency. (BA went through some pretty harsh workplace reform).