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Pressing questions of the moment: why are the airlines in Asia so much better, on average, than airlines in North America and Europe?

Brian Leiter

Even SkyTrax confirms it (and that's just their "overall" best):  put aside the fake oil fiefdoms in the Middle East, what one sees, across the board, is that Japanese, Singaporean, Korean, Australian, and Hong Kong airlines are at the very top.  What explains it?  Higher expectations of their clientele?  Less carrying costs in terms of pensions and medical care? Something else.  I once flew ANA (Japan) and it was exceptionally good, heads and shoulders above any American airline.  (The only American airline that is not a consistent embarrassment is Delta.  Why?)

Does anyone in the vast and highly informed readership know why the East Asian (plus Australiasian) airlines are so much better?

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9 responses to “Pressing questions of the moment: why are the airlines in Asia so much better, on average, than airlines in North America and Europe?”

  1. Siddharth M.

    My broad and not-very-well-informed sense is that the American airline companies are protected domestically from international competition, so they can let their standards fall. They do have to compete on the market for international flights, but the huge domestic US market acts as a backstop. And the entry costs for new airlines are very high, so you can't just start a new airline and outcompete the older airlines, especially with lobbying pressure from the old guard.

    Now, it's true that Asian carriers also benefit from protectionism within their own countries, but their domestic markets are not nearly as large as the US domestic market (e.g., the US domestic airline market size is about 50 times the Japanese domestic airline market size). So for the Asian companies it's do-or-die on the international market, and so they have to maintain standards. To take an extreme example, Singapore doesn't really have a domestic market to speak of, so Singapore Airlines has to survive almost entirely on the basis on their performance on the international market.

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  2. David Y.

    I've had occasion to take some domestic flights within India, on a few different airlines. There are at least two clearly different strategies afoot in that market, service wise. The value lines (like SpiceJet) are chocked full of advertising and tie-ins in a way that would put any American airline to shame, but have few extra nickel-and-dime fees like even our big carriers. The more premium lines (like IndiGo), have much less overt advertising and more included services. There's an even more expensive level of service that costs 2 to 3 times as much that I haven't bothered with, mostly carriers that also fly internationally (like Air India).

    But the thing is, by local standards, even the value flights are a luxury good. Most recently (2019), it cost me about 4000 rupees to fly, nonstop, one way from Bombay to Delhi (then about $50), a distance roughly equivalent to Chicago to NYC, on SpiceJet. And about 5500 rupees to return, then about $65, on IndiGo. Doesn't sound like much, but the per capita GDP in India is about 1/10 of ours, and the airfares are about 1/3 of ours (JetBlue for Chicago-NYC is $159 on the same day as ~$50-$55 for BOM-DEL). So, relative to per capita GDP, flying is about three times as expensive.

    In short, in less well developed flying markets, the fact that flying is a more premium good may impose better behavior on the airlines. (Interestingly, IndiGo is cheaper than SpiceJet for two weeks from today, and was a much nicer experience for me.)

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  3. Curtis Franks

    I'm not a frequent flyer, but except for a couple of rides in my youth in unpressurized cropdusters, all of my airplane flights to date across three continents have been markedly worse than an afternoon in jail, so I will never appreciate these fine distinctions between airlines, possibly because of their similarity to the sort of scholastic hairsplitting that has never appealed to me in philosophical discussions either.

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  4. Siddharth M.

    I agree that domestic flights are a luxury good in India, but your explanation can't be the whole story because the countries whose airlines Brian listed are all much richer than India. For instance, Singapore is even richer (in per capita GDP terms) than the US. Japan and Korea are not as rich as Singapore but still comfortably in a place where domestic flights wouldn't be considered a luxury good (I think; I don't have first-hand experience). But all of them have better-quality international flights than US carriers.

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  5. Frank Saunders

    As someone who lived in Asia for 10 years (8 in Hong Kong, 2 in Korea), I think that Siddarth M. is right on the money about the makeup of domestic vs. international customer base. Like Singapore, Hong Kong has no domestic destinations whatsoever, so its flagship carrier (Cathay Pacific) and even its airport caters to a global clientele with international destinations. To contrast, domestic flights in China, for example, don't strike me as providing a much better experience than domestic U.S. flights.

    Also it's good to bear in mind that there are some thoroughly mediocre Asian carriers as well.

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  6. Tom Ginsburg

    Superior civilization.

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  7. Matt Lister

    Having recently flown on both Qatar and Emirates I can say that both are very nice, though the huge size of the planes is a bit of a drag in some ways. They do have noticably more leg room in their normal economy class than do most other airlines I've been on. I've also (as in, just in the last 24 hours) flown United internationally, and it was not bad at all – better than Qantas is domestically, at least. (I'd say that the Domestic united flight I had today was pretty similar to the domestic Qantas flights I've had.) The more budget Australian airlines are, especially domestically, not very good – lots of charges, inconvenient, very small seats, very many delays and cancellations, etc. Over-all, international flights seem a lot nicer than domestic ones, for some of the reasons noted above.

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  8. Mohan Matthen

    I think Tom Ginsburg is clearly correct. But just to say: I have never found the service on Qantas or Air New Zealand to be superior in any way. And the same, regrettably, goes for Air India, Jet, IndiGo, etc. (So much for Indian civilization, I guess.)

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  9. Kenny Easwaran

    I think before the 1978 deregulation, American flights were also luxurious. But in the US domestic market, greater luxury doesn't win as much as cheaper flights, and so the US carriers aim to cut costs where they can, and only improve passenger experience insofar as it can be done without too much increase of costs.

    I believe that some of the national flag carrier airlines operate at a loss and are subsidized by the government, because of the value of being a major air travel hub – this is probably especially true for the Persian Gulf airlines (which also have the advantage of a home hub that can service all of Europe, Africa, and Asia, while the European and Asian carriers have home bases that are too far from some parts of those continents).

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