Quote:
Originally Posted by Arthur T
Seems service quality matters
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I'd be surprised if 'service quality' alone delivered those results, Arthur. Emirates and other fifth freedom carriers running across the Tasman have the ability to price over the marginal cost of providing those additional Tasman services, rather than over the fully-allocated costs that Qantas, Air NZ, and Virgin Blue have to wear. This gives them a substantial ability to out-discount the full-service (and potentially the low cost) players, and is basically capacity dumping on the premise of offsetting
some of their fixed costs, rather than letting their aircraft sit idle and unproductive on the ramp at Sydney. This was obviously a major argument put forward by Qantas and Air NZ during their merger and TNA campaigns, and remains valid in my opinion, nothwithstanding the relatively small scale of the operation.