There are several reasons it is cheaper to fly internationally. One is simply a matter of scale. You can put far more people in a 777 than in an EMB yet you still need ground support for both. (ramp support, gate support, catering etc etc.) Even taking into account the higher costs of operating the 777, the overall cost per pax, per mile will be less on a long overseas flight.
Second and in my mind the largest problem is the matter you already touched on, TAXES. Have you looked at the the landing fees in Canada? YYZ is the most expensive airport in the world to operate from. Have you looked at the NAVCANADA fees to operate in Canadian Airspace? Almost every airport in Canada has added its own AIF. In some cases it is as high as an extra $30 for every pax. Add in the already high government taxes and you have situations where the taxes and fees are more than the actual price of the ticket
BC....I agree with what you say above...but it comes back to a point I have made before. The airlines and airports HATE the high taxes and "rent" charged as is makes them less competitive. It is already known that a lot of people in the GTA bypass Pearson altogether and go to Buffalo, and articles linked to this debate say the same for Montreal and Vancouver.
This same government that everyone is lauding for their stance against EK is also making it difficult for YYZ and its domestic hosts to compete against the Americans et al by charging excessive rent and high taxes.
Toronto is in the top 20 when it comes to aircraft movements (yearly) yet can't even crack the top 30 in number of passengers. With the entire GTA to draw on...and beyond, plus the airport being a hub, those numbers should be way higher.
It is in the GTAAs interest for the govt to lower the rent.....AND increase competition/frequency of various airlines (including emirates IMO).
BTW Sydney (the comparison which is being made in this debate is Australia) ranks 40th in yearly traffic movements...yet is inside the top 30 for passengers and processes nearly 3 million more a year than Pearson. SACL must be loving it!
Regarding the NAV Canada fees...that is one I will look up out of interest (the A380 charge will be no small change I am sure) It is also for this reason that all the hotheads out there advocating "banning" EK from flying through Canadian airspace are operating outwith the boundries of reality. Losing revenue from a paying customer that does not cause us any problems would not be in the business plan.
NAV Canada infact would stand to gain if EK flew daily with increased revenue from increased frequency (if the plan was the A380)