Well said Yossarian,
Going by your name, you'd be well aware of the concept of "Catch 22"...
It seems that :
Pilots are forced to accept conditions which are unacceptable (pay or otherwise).
Companies are forced to accept pilots who accept the unacceptable, due to economic pressure from other operators who are cutting costs to win customers.
Three constants here are:
Pilots are KEEN to build up their hours.
Customers are KEEN to pay the least possible.
Operators are KEEN to make their businesses pay, by attracting the customer.
(As an aside, maybe many pilots would not be so quick to leave GA, and get into the majors, if pay was reasonable?)
In many ways, it comes back to supply and demand.
If Yossarian says a 6% increase in fares would solve the problem (please, any GA operator out there confirm or deny this...), then I'm sure the pax would complain at the price rise, as customers always will, but if every GA operator toed the line, and charged a REASONABLE price (to account for operating costs, staff wages, overheads, safety etc.) the reduction in demand would be negligable - unless of course the pax could get a cheaper, more effective service by using other means: bus, car, hovercraft, horse drawn buggy etc.
Aviation provides a service which can not be duplicated. Until another method of transportation comes along which can take someone from A to B as timely as an aircraft can, aviation will have a place. That is, aviation has a relatively fixed level of demand for its services.
The classic problem with supply, is that oversupply will inevitably prove an effective filtering mechanism for demand.
More supply + same demand = more competition, which is usually a good thing.
But oversupply + same demand = overcompetition, which proves to be a reason for suppliers to cut corners, and cut costs to stay effective - it's a fine line, and one which seems to have been well and truly crossed by GA.
We have seen the ACCC and Prof. Fels taking care of monopolies, but is there any Govt. body which looks at OVER competitive industries? (Apart from Darwinian natural selection, survival of the fittest)
It's a fair point that the level of profit expected by GA operators is well below anything expected by companies in the broader spectrum of industry outside of aviation. In fact, it's a credit (?) to GA that many companies continue to operate on margins which would have shut down companies in any other industry, due to their dedication to, and love for the industry.
As Yossarian states, the only (obvious) way is regulation. Be it industry self regulation, regulation by an effective pilot's union, or government regulation.
And if that is a double edged sword, or undesirable, well so is running yourself into the ground trying to make an industry you love pay something more than just enough to cover the cost of tea and bikkies.