Moreover, the industry is structured so that airlines often act as tax collectors. Airline fuel is untaxed because of a series of treaties existing between countries. Ticket prices include a number of fees, taxes and surcharges beyond the control of airlines. Airlines are also responsible for enforcing government regulations. If airlines carry passengers without proper documentation on an international flight, they are responsible for returning them back to the original country.
Ferries are not really cheap any more – certainly not like they used to be – but the vessel fleet is better, safer and faster than in previous years so the cost is justified. You can get exceptionally cheap deals on longer-haul routes if you are prepared to forego a booked seat: €14 v €40 on a run to a mid-distant island, but it’s probably wise to consider taking fast catamarans to get to core islands (Mykonos, Santorini, Paros etc.) and even then, go the extra 10/15% for Business or even VIP class for the extra comfort. On longer hauls it can be cheaper to fly if you seek out flights online and book beforehand.
Major airlines dominated their routes through aggressive pricing and additional capacity offerings, often swamping new start-ups. In the place of high barriers to entry imposed by regulation, the major airlines implemented an equally high barrier called loss leader pricing. In this strategy an already established and dominant airline stomps out its competition by lowering airfares on specific routes, below the cost of operating on it, choking out any chance a start-up airline may have. The industry side effect is an overall drop in revenue and service quality. Since deregulation in 1978 the average domestic ticket price has dropped by 40%. So has airline employee pay. By incurring massive losses, the airlines of the USA now rely upon a scourge of cyclical Chapter 11 bankruptcy proceedings to continue doing business. America West Airlines (which has since merged with US Airways) remained a significant survivor from this new entrant era, as dozens, even hundreds, have gone under.