Don’t look behind the shiny storefront

A couple of days ago Lufthansa CEO Wolgfang Mayrhuber used an interview in Frankfurter Allgemeine Zeitung  to complain about unfair competition from  by Emirates & friends. Whenever European airlines do so, they claim subsidized fuel, state money for aircraft financing and tax breaks. This may or may not be true; at least they won’t be able to prove it. Plus it misses the most important point.

The strongest competitive advantage comes from the framework conditions the Sheikh’s airlines enjoy. Emirates can undercut the prices of European airlines, because it runs a hub operation which is virtually free of social and environmental standards. There are no communities around World Central who have delayed the project by endless lawsuits or who oppose a 24hrs operation. 

And there are no unions the management has to deal with. The guys in the front row and the ladies in the restaurant behind them may be well paid (however are unprotected), but don't take a look behind the shiny storefront. There you will find, that a 21st century airline is being run with 19th century conditions of work. The thousands of unskilled workers on the apron loading and unloading the airplanes, sorting luggage, cleaning everything or cooking the meals for the passengers are from Pakistan, Bangladesh and the Philippines. Payment and labour conditions are below any standard including virtually no social security. It’s the sweatshop of the airline business.

 

That's a point nobody talks about, but it's a competitive advantage which is worth hundreds of millions a year.

Heinrich Grossbongardt 
h.grossbongardt@expairtise.com 
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