It would be interesting to understand the logistics behind this. The news reports I have seen indicated that they were mainly looking at providing feeder flights for the *A international services, and any local travellers they picked up would be a bonus.

So my question is, how much do carriers pay for these domestic feeder flights? To make sense it would have to cost them less per person than what they would have to pay Qantas. I wonder what UA does pay Qantas when I fly BNE-SYD-SFO? Probably more than a red-E deal fare, but surely not so much that it's worthwhile starting up their own local carrier instead.