Lines between countries of different wages

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14 years 3 months

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Who sell most tickets to lines between countries of different wage levels? The lines would be under some sort of bilateral agreement. For example, between USA and UK, Bermuda II says only 2 airlines of each country can fly to Heathrow. Also only to a limited number of deliberately inconvenient US airports... Subject to availability of slots - and BA holds the best ones in Heathrow. Also Bermuda II refers to IATA for prices, right? The capacity is not directly controlled - so most seats are sold by Britons, as they fly 747-s to Heathrow, while the Americans fly 767-s. Well, US and UK have roughly similar wage levels. But what about lines to countries with lower wages? While much of the cost of flying comes from the fuel - and the price of fuel is relatively uniform around the world, since the fuel is cheap to transport on ground - it is said that labour costs are still the biggest cost item of airlines. It would follow that the most competitive airline on any line is whoever can keep the labour force with lowest wages. And obviously, on a line between countries of different wage levels, the airline of the richer country cannot hope to match the labour costs of the competitor! So... if the slots are divided equally between competitors, the airline of the poorer country would have fabulous prices and high load, while the competitor would be plagued with losses whether they sell tickets at below cost or make the tickets more expensive and lose loads. If the prices are controlled so cheap tickets are forbidden, the airline of poorer country could afford to offer superior service at equal price. For example, Emirates are getting loads of Airbus 380-800s in April 2007! And they have their proposals. Which include an Airbus 380-800 fitted with all-economy 780 seats. With food paid from self-service counters and charging for optional IFE. They declare they can make profits with Heathrow-Dubai-Sydney 400 € return tickets. To Sydney for €200 - or to Dubai, or somewhere else, like India, for less than that... imagine...
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