Everybody blames Unions for the high cost of air-travel - their wages push up the price of airfares. But that is not really true because it presupposes that airline management would want to charge lower fares but cannot do so because of Unions. That clearly is nonesense!
It is the very high airfares that allow unions to get very high wages
Airlines can charge very high fares because of they have a product with no satifactory substitutes and they have a monopoly on airline slots. Unions can therefore demand very high wages because airlines can "meet" those wage demands because of the high airfares.
This is the classical economic rent theory first realized in 18 century Britian- then people were starving because bread was too expensive. Landlords were blamed for charging high rents - the economist David Riccardo demonstrated it was the other way around - high rents were due to high prices! (The real reason for the high cost was the ban on corn imports)
Think about this logically - An airline can make $1 million profit (at oportunity cost) at its current costs. The Unions demand pay increase of $1 million - what can the airline do - it cannot hire substitute workers as it is probably unsafe and not practical for a big airline. It cannot store the product or subcontract it to a third world country like Nike, or Addidas do. It is in the best interest of the airline to pay up- the result is that airline will loose all its profits. Thereotically the airline will be willing to meet all wage demand up its cost of capital. The profits earned will only be just enought to stay in the business (zero economic profit)
In reality the airline management are quite happy making big salaries and paying big salaries to its staff. They have become self-perpetuationg organizations.
This basic theory also applies to store locations. In England the shops in the prime location in Oxford street make the lowest profits! Why? Landlords can jack up rent to the point that all advantages of the location are eliminated.
it also explain why movies stars salaries are so high - If Julia Roberts can bring in an extra $20 million in box office - thats how much she can demand for her services
If you do not believe me then ask yourself - how is it that industry with stunning growth, monopoly control have only average to below average return on investment (airlines and studios!!!)
Unions are no worse then any other profit seeking group - they exploit their position like anyone else would do. So do not accuse me of attacking unions - I would do the same!!