Competition between the airlines of various countries is not a level playing field. Here in Australia, our national airline - Qantas - is a " for profit " business financed by thousands of ordinary citizens who hold shares in the airline. Some of it's competitors are airlines totally owned by the government of their host country - and often the main purpose is to serve the economic needs of that country rather than make a profit.
Some countries are perfectly happy to finance their national airline at a loss if it serves the purpose of bringing in tourists to keep the internal economy running smoothly. In such cases, fares are set to attract custom. There is also the aspect of national pride. We are seeing this emerging in the Middle East where rich - but numerically sparse countries - are ramping up airline services to gain world prominence.
It seems that economic giant - China - is about to try and seize a bigger share of the lucrative " Kangaroo route " connecting Sydney and London. China Southern Airlines will be offering more flights with slightly bigger seats and leg room, almost double the permitted amount of carry-on luggage - and a fare of just $ 1442 compared to Qantas's $ 2207.
There is another difference. The Qantas version of the Kangaroo route now goes via Dubai in the Middle East. The China Airlines trip will go via Guangzhou in mainland China. This will involve a new tactical battle. It is expected that " stop over " offers will soon seek to offer those travelling to Europe an opportunity to have a quick look at the Chinese miracle on the way.
It seems that Qantas has predicted the coming airline war and has taken steps to shore up it's market. It is in partnership with Emirates and this combination may be able to go blow for blow with the expansive Chinese. It could be rewarding to be in partnership with a country that is a major oil producer when the industry involved uses jet fuel as it's main raw material.
It will be interesting to see what the future holds. " For profit " national airlines will find it hard to hold market share if this airline war degenerates into a price cutting tussle between airlines owned and operated as national symbols - without regard to profit. It seems likely that some countries will protect their internal air services by excluding foreign airlines from competing on inter-city routes.
No doubt there will be an attempt to govern the industry by getting world airlines to agree to a set of sanity rules - but this sad old world has a long history of national interest trumping promises made across all trade spectrums. The one sure bet is that world travel will keep expanding as prices come within the reach of an ever expanding number of more affluent people.
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