Oh by the way BB is speaking rubbish when he says that within Asia he cannot pay proper salaries because Asians cannot afford to pay Australian airline fares.
Some time ago, I did a cost per employee comparison of major airlines, based on their annual reports
Imageshack - airlinestaffcostshz7.jpg - Uploaded by docpepz
SQ has higher labour costs per employee than NZ, CX, EK, MH and TG. Actually SQ's costs per employee are about double that of MH and TG, which are the two countries closest to Singapore. (I don't have the figure for Garuda though)
As those stats were from 2008, with the depreciation of the Euro, SQ and LH have similar costs per employee.
SQ's costs per employee are 20% lower than QF, I suspect mainly due to to the strong AUD. Dollar for dollar, SQ's cost per employee is the same as QF's. Anyway the AUD is so volatile it could swing either way for Aussie companies which outsource solely on forex.
Yet SQ has consistently been more profitable than MH, TG, GA and the myriad of airlines from countries with wages up to 90% lower than Singapore.
Foreign exchange? The SGD today is 35% stronger against the Thai Baht, 40% stronger against the Malaysian Ringgit and 700% stronger against the Indonesian Rupiah when compared to 1995. SQ hasn't collapsed as a result.
SIA operates from a high wage, high cost economy compared to its regional peers, and the SGD has been in a longterm uptrend against most if not all regional currencies. If wages were the be all and end all, SQ would have gone bankrupt today. Yet it is MH, TG and GA who have all flirted with bankruptcy. And despite paying significantly higher wages, SQ's cost per ASK is lower than all SE Asian Full Service Carriers.
Typically, high wages are a symptom of a developed economy and high labour productivity. This is why a Malaysian working in Johor Bahru which is 2km from Singapore, would earn 3 times less than a Singaporean doing the exact same job.
Has any country ever successfully devalued its currency and cut the wages of its people to ensure continued success?