rootsair
Posts: 4012
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Plane Tickets According To Country Wages?Fairer!

Sat Dec 10, 2005 4:41 am

I've always wondered if a plane ticket is the price according to the wages of a country...since I think the airline would lose money I think its not the case.

Lets say a GVA-MAD-SJO roundtrip ticket on IB cost me 1250 francs tax inluded (812E, 960$)...
However I guess someone who flies SJO-MAD-GVA round trip will pay the exact same quantity....however cost of living is not the same in Switzerland and Costa Rica and wages are a lot higher in Switzerland...

1) Don't you think there is some inequality...that proportionally plane tickets are ALOT ALOT more expensive for people that live in developing countries where wages aren't as high as in developed countries?

2 )Or is it that the airlines average the price that a Swiss person would pay on the basis of wages in Switz and the price a costa Rican would pay on the basis of Costa Rican wages

3) Does any airline practise fares according to a country's wages ?


REGARDS BM

[Edited 2005-12-09 20:42:07]
A man without the knowledge of his past history,culture and origins is like a tree without roots
 
joness0154
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RE: Plane Tickets According To Country Wages?Fairer!

Sat Dec 10, 2005 4:44 am

The cost of operating a plane does not vary from country to country.
I don't have an attitude problem. You have a perception problem
 
RichardPrice
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RE: Plane Tickets According To Country Wages?Fairer!

Sat Dec 10, 2005 4:47 am

Quoting RootsAir (Thread starter):
1) Don't you think there is some inequality...that proportionally plane tickets are ALOT ALOT more expensive for people that live in developing countries where wages aren't as high as in developed countries?

They may be a lot more expensive to the local population, but the cost of providing the service is the same whoever you are. This is like saying a rich person must subsidise a poor person in everything they share, which is just plain wrong.

If they are both receiving the same service, why should someone from Switzerland subsidise someone unrelated from Costo Rica when it isnt going to benefit themselves in anyway shape or form.

Now, when you BUY something off a Costa Rican, you should be prepared to pay them the same as you would someone in your own country! Unfair trade prices are the worst thing that can happen to a third world trader.
 
ikramerica
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RE: Plane Tickets According To Country Wages?Fairer!

Sat Dec 10, 2005 4:48 am

I don't know how to respond other than airlines are not charities nor do they have a sliding scale. They function based on if a route can be sustained, period.

To suggest anything other may be touchy feely, but it is counter to the advancement of the industry. You are suggesting some kind of price regulation, and, well, that's not been borne out throughout history as a positive move.

Remember, air travel used to be too expensive for most citizens in "developed" countries, but airlines found ways, especially after the REMOVAL OF PRICE REGULATION, to make it more affordable.
Of all the things to worry about... the Wookie has no pants.
 
764
Posts: 486
Joined: Tue Jul 31, 2001 6:34 pm

RE: Plane Tickets According To Country Wages?Faire

Sat Dec 10, 2005 4:51 am

Well, you are going into yield management here - my favorite rant topic.

You will hardly ever find equal fares for both directions. Take Germany and the US for example. Until the late nineties it was a lot more expensive to fly, say HAM-LAX-HAM than in was LAX-HAM-LAX. That changed and for several years the opposite has been true. Good for the Europeans. Now it is changing back.

It obviously has something to do with the incomes, but here's what really happens:

People in either ocuntry will be willing to pay a certain price for the ticket. This is also influenced by their income, but also by their personal preference, culture etc.. For example during vacation periods people pay more than they ever would in off-peak seasons. As you raise the price of the ticket more people will reach their "reservation price" and not purchase the ticket. Increased price - decreased demand. Simple concept.

In general airlines have to try to get 100% load factors. And since vacation periods differ and people's preferences vary, they have to look at rather complicated equations. In many cases it can be perfectly reasonable to fill the plane with passengers from only on side of the ocean.

In the end the price is determined by the maximum possible profit, nothing else. This can in some cases mean a load factor lower than 90 or even 80%.

In markets with lots of competition an airline of course has to look at what the other guy does as well.

[Edited 2005-12-09 20:53:47]
 
RichardPrice
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RE: Plane Tickets According To Country Wages?Fairer!

Sat Dec 10, 2005 4:52 am

Quoting Joness0154 (Reply 1):
The cost of operating a plane does not vary from country to country.

To be pedantic, it may actually vary. Planes from certain countries dont have to have as stringent checks as planes from other countries, which lowers the cost of maintenance and thus operation.

This is the reason the Afghan 727 that landed at Stansted couldnt return to Afghanistan to resume service - the CAA/JAA wouldnt allow it to fly without the requisite checks which the airline couldnt afford.

Only if two airlines were running the services to similiar airports with similiar maintenance demands, eg both into EU or US airspace, then yes the costs would be comparable.
 
ltbewr
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RE: Plane Tickets According To Country Wages?Fairer!

Sat Dec 10, 2005 4:53 am

Sometimes the prices of the same goods and services may be lower in one country vs. another. Major USA vehicle manufacturers price their vehicles in Canada maybe 5-10% less than in the USA. This is to offset the high total sales taxes (i.e. the National GST in Canada), and the slightly lower buying power of people in Canada. Exchange rates and the costs of exchange may also cause different fare prices for the nationals where an airline is based vs. inbound foreign nationals.
 
kaitak
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Joined: Wed Aug 18, 1999 5:49 am

RE: Plane Tickets According To Country Wages?Fairer!

Sat Dec 10, 2005 4:53 am

Very good idea! I live in the UK and I want to pay my country's air fares according to salaries in India or Brazil!

(Maybe Gol or Kingfisher could set up here!)
 
exFATboy
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RE: Plane Tickets According To Country Wages?Fairer!

Sat Dec 10, 2005 8:03 am

Quoting RichardPrice (Reply 2):
Now, when you BUY something off a Costa Rican, you should be prepared to pay them the same as you would someone in your own country! Unfair trade prices are the worst thing that can happen to a third world trader.

One problem with this theory - presuming the mechandise is identical, if you're going to pay the Costa Rican the same amount you would pay someone in your own country, why would you buy from the Costa Rican?