Saturday, March 15, 2008

Want to make Air NZ uncompetitive?

So Air NZ pays its Shanghai based crew less than the NZ ones. I am sure the UK based ones get paid more. It's called a market, and presumably there was no shortage of good quality applicants in Shanghai. I guess those on the left will want pay parity - always to the highest level, which would mean paying them all like UK crew - which would kill off the routes to China for starters, and then probably kill off much of Air NZ's business.

You see the routes to China are not particularly profitable - largely because the planes are used mostly by Chinese tourists paying for the cheap seats - there is little business class demand between NZ and China. So to take advantage of this market Air NZ needs to keep costs low.

The alternative is to tell Air NZ to pay the same rate - make the routes uneconomic - and then a Chinese airline will fly back in to take advantage of the growing business, undoubtedly paying even less than Air NZ.

Meanwhile those in China who don't want these jobs could refuse of course, and China isn't exactly suffering from economic malaise. The idea that those living in Shanghai are being exploited when they are paid generous wages by local standards is a nonsense - though I doubt the Greens will catch trains all the time in protest!

Yes that's how those on the left would let it happen. Winners right?

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