King on a Wing
Airlines like Emirates, Qatar, and Etihad can pay lower salaries as there is no income tax which is a hidden subsidy. Also most of their ground staff and cabin crew are from poor third world countries.
They can also offer free accommodation for pilots due to low building costs and land values. Can you imagine what it would cost to give Pilots free accommodation near Heathrow or New York? Pilots are interested in their take home pay after deductions and other costs they would incur in their home country compared to the Gulf and unless you work for work for one of the Main Airlines in the world one is much better off in the Gulf although there is a price to pay which does not suit everyone.
Infrastructure costs like building accommodation ,hangars etc are built on desert land which is owned by the ruling families in the main using dirt cheap labour. Have you ever thought where they all live in the desert when you see them being driven around in the back of open trucks?
Desert does not have the same value or cost as land in Singapore or London Heathrow or New York, so all those costs are much lower than competitors so they can have shiny new aircraft with all the IFE where once Singapore had that kind of advantage over airlines like BA or QF all to themselves they now have the Gulf Airlines with an even lower cost base.
Even in Singapore one used to see ( and probably still do?) labourers from the Indian subcontinent being driven around in open pick up trucks.
SQ also have other competitors operating from there particularly for short haul routes which they never had a few years ago. Hence they hived off SIA Cargo as a separate airline to reduce costs and now Scoot and expand Silk Air all of which have a lower cost base which in turn reduces the need for such a large number of aircraft in the SQ fleet.
Last edited by millerscourt; 27th November 2012 at 08:54.