The "market" rules
The truth is, the fare charged by airlines has absolutely no relationship to the distance travelled and indeed only a marginal relationship to the costs incurred in delivering the service. The price is determined by the market. For example, at Thanksgiving, demand for flights from the UK to the US will be very high just before the holiday and low the in the other direction. The reverse will then happen after the holiday. This is obviously because Thanksgiving is not celebrated in the UK, and americans will want to get home. Therefore, the pricing of these two legs will reflect demand. Low prices from the US to the UK, but high prices from the UK to the US. I have no problem with this in theory, but as we have seen in the financial markets, when markets are deregulated they are abused. I think we have reached the point at which passengers are abused by the airlines power and the market is now distorted. Time to reintroduce some regulation, because they are inadequately regulated now.
Taxes in Europe are considerably higher, as we operate "social" taxing strategies and demand is deliberately suppressed for items which are seen as socially damaging, such as polluting airplanes and cars. Therefore, prices will be higher in such cases. This is however often hidden by the ridiculous pricing of the tickets which make this relationship less obvious.
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