moondog

Agreed. Providing, verifying, and referencing facts can be laborious at times. That having been said, it's difficult to take anybody who doesn't make such an effort seriously. Most of us learned this concept in high school, though it appears that aviation management and airline analyst colleges don't stress it.

eternaltransit

With tongue firmly planted in cheek, I would say that if your allegations about massive corruption with regards to the falsification of accounts etc. are true, as well as the co-opting of political players and engagement of PR firms to try and win a public relations war, then I would say that eminently qualifies them for entry into the "big leagues" considering the track record of various entities in the USA and other global business centers...

Nothing says you are a serious player on the global stage like when you get multinational lobbying efforts against your operations and expansion...

---

Still, once again I think we need to clarify one or two things, namely that there is an issue with creating this false dichotomy between "corrupt" and "white-than-white" which is unhelpful (intentionally or not). I don't think anyone here would argue that Qatar isn't extremely opaque in the way it acts, nor that Dubai as a jurisdiction in which to do business isn't completely and utterly transparent. But then again, the situation isn't completely binary - there are massive differences even amongst "western" economies, just take a look at the Transparency International Index for 2014, which has a major difference between say Denmark at the top (92 points) and Spain halfway down the list (60).

You do give away though, in your post 2335, that you judge anything that deviates from what you perceive as Western (USA) norms in as a scam: You are of course completely entitled to your own personal ideological views, but you must be careful not to allow those views to fabricate evidence or incorrectly infer inferences that aren't there or unsupported by data, I think, in the interests of fairness.

However, there is documented evidence that Qatar regularly injects cash into Qatar Airways to keep it afloat as a going concern.

Is now the allegation that because Qatar, one of the richest countries on the planet, with massive surpluses to spare, is doing it, Dubai is doing it as well? Where is the evidence for that claim, and what would be the method of doing it considering:

- if Qatar, opaque, small and very wealthy, can't keep their cash injections a secret, then how does Dubai manage to do it, even though they are much poorer than Qatar. Or is the allegation now that Dubai is even more authoritarian and has even stricter control over its economy than Qatar? Because if that's the allegation it is completely laughable to anyone who has lived in the Gulf or done business there!

- How would Dubai get all the funds to illicitly channel into EK and hide it, if even Qatar can't, given that Dubai is much, much more (totally) dependent on international creditors and the international financial system than Qatar which can just sit there and sell liquified natural gas all day and stick two fingers up at the rest of the world?

---

Bribery of foreign officials to get business, whilst ethically dubious, is a distraction from the issue at hand, again, which is the viability of positive cash and profits from operations. The issue is again, why you think:- why does the existence of some routes that make no economic sense imply the organisation is a scam (in the, we're falsifying financial accounts sense, not in the "it's not American" sense)
- why does the business model of super-connection of various extents (with lower cost bases) only apply to "small, authoritarian ME nations" when you see it happening in Turkey, and also historically Hong Kong, Singapore, The Netherlands (which the ME carriers took inspiration from).
- what exactly are the problems you have with a low-cost low-margin business model except the ideological distaste that they don't seek maximum short-term financial profit (i.e. margins above all else)

A simpler question - work us through an example with numbers as to why some of these flights are economically unviable given the independent data that's out there regarding loads, fares and operating costs. I am not an ideologue about this and am perfectly willing to change my mind when presented with more evidence and data. Humble pie is tasty!

Dieuwer

Considering what the OP has said so far, it is mindboggling that the OP has not opened a similar thread in the Qatar forum.
Because if, according to the OP, Emirates is a financial scam then surely Qatar Airways is even more a financial scam.

iahphx

And the fact that those governors have gone to jail is also important.

Obviously, what happening with FIFA is extremely relevant to the question of whether these government operated Gulf airlines are believable when they say their books are clean and there are no subsidies.

Well, that's the interesting thing. It's plain as day that Emirates is more of "a business" than Etihad and Qatar, but it's also plain as day that it's not run in a manner that a commercially independent company concerned about profitability would be run. Something is definitely "wrong" there, and it manifests itself in many ways, both direct (like route selection) and indirect. The indirect stuff is also fascinating. Like why does Tim Clark not complain about Etihad and Qatar? As I've said many times, and as Emirates fans have ignored many times , it is 100% impossible to run Emirates operations profitably with Etihad and Qatar doing the exact same thing -- but more stupidly. The only real commercial hope for Emirates -- if it were a "real business" -- would be to demand that the subsidies to Etihad and Qatar end. If Emirates was "clean," they'd join the US3 and demand changes at Etihad and Qatar, because those 2 airlines are doing 100x more damage to Emirates profitability than they're doing to US3 profitability. But not a peep.

Indeed, but that's hardly interesting. Even Emirates fans can't really defend Etihad and Qatar as "real businesses." To say they should have unlimited rights to Open Skies is to argue that every airline gets Open Skies no matter how much money their gov'ts are pumping in to keep them afloat ("more competition lowers fares which is good for consumers, and we don't care how these airlines get funded"). Instead, Emirates supporters argue that their airline is "real." Big difference.

Dieuwer

Suppose Open Skies is annulled and the US signs a bilateral agreement with the United Arab Emirates. Would you be pleased and rest your case, or would you continue ranting about "subsidies"?

eternaltransit

Neither EY or QR are accusing EK of anything, or slandering EK in public forums - EK has done EY and QR the courtesy of not commenting about them either. To accuse them of accepting subsidies is to implicitly accept the argument of the US3 and that is of course, vehemently denied.

What the US3 say about EY and QR is irrelevant - Tim Clark replies to attacks on his airline and by extension his personal integrity, why would he try and spin this around to attack competitors to eke out a possible advantage. Whilst I admit this might be business-as-usual in some parts of the world, and the expected thing to do for some, I would argue that political concerns (given the assumption that QR is intimately related to the state of Qatar and EY to Abu Dhabi) - the image (and in the GCC, image is extremely important) of the expat President of a state-owned enterprise in a neighbouring Emirate which is a strong ally, directly criticising and repeating allegations that are consistently denied is going to be a serious diplomatic faux pas.

Far better just to be silent and deal with the attacks on his own airline rather than complicate matters.

---

EK is now not only hanged on the actions it takes (economically questionable - in the eyes of some - routes) but also on inaction (not joining a fashionable bandwagon of allegations against other people who might be competitive threats), even when both decisions can be explained with much more plausible and innocent answers.

I'm not a "fan" of EK. I just hate to see blatant unfairness, misinformation and prejudices being peddled about on a forum that I enjoy using for the information and community it provides - and the only way to tackle that is to call it out when it rears its ugly head.

The question remains though about the previous assumptions: run us through the scenarios where each sector loses so much money the whole system is fraudulent, and what you would need to do to execute a conspiracy to secretly fund all these losses?

You want to go where?

So therefore what happened with the US Olympic bids for Atlanta and SLC also suggest that the US3 books are unclean as well?

GUWonder

As I told a relative, the "cultural difference" argument is nothing but a racist argument behind an easily pierced veil.

There is more diversity within a so-called culture than there may be between cultures. But racists have a hard time accepting that as they cherry-pick to try to assign negative attributes to ethnic/religious groups which they fear/hate while ignoring the same attributes in play "at home" too.

UA1K_no_more

Considering that the U.S. indictments are for bribes and actions in connection to the 2010 WC in South Africa and other non-Qatar issues, what in the world are you talking about?

irishguy28

Somehow, I suspect your choice of location would be irrelevant as regards that eventual outcome.

irishguy28

So you will surely agree then with the statement that it is 100% impossible to run American Airlines profitably with Delta and United doing the exact same thing - but more stupidly (I think it should be apparent to all that AA is the least stupid of the US3).


If people "ignore many times" what you say, it is because it is patently incorrect.

eternaltransit has, on many tens of occasions throughout this thread, given back-of-an-envelope calculations that clearly refute the oft-made allegation that Emirates can't be run profitably. If you are to have any chance of convincing the readers of your unproven hypothesis, then you will first have to challenge eternaltransit's figures, and show where they are wrong. Given your apparent certainty in the veracity of your unsupported statements, then you must have your own calculations already done. If not, please reproduce those provided by eternaltransit showing where (s)he went wrong.

Unless you support your allegations to a similar extent, your posts will continue to come across as mere groundless bleating.

iahphx

The best defense is a good offense -- certainly a principle the Gulf airlines like to apply with the ridiculous claim that the US airlines are "subsidized too" -- but this takes the cake. So you've been caught bribing FIFA officials millions of dollars to get the World Cup, and your ethics and business integrity are called into question.

"It's racism!"

Please. Spare us the nonsense.

irishguy28

So:

- the US airlines have never been subsidised; and
- FIFA's travails (which are a result of long-running investigations into numerous allegations of corruption dating back to at least 1990) are, if not merely "relevant" to the topic (for some unexplained reason), then ACTUAL PROOF (for some unexplained reason) of impropriety at Emirates.

You said earlier that you previously worked as a journalist - I sincerely wish you still were, as I would give anything to read the exposé that you would prepare to unmask the deception of Emirates. I have no doubt but that it would be an impeccably-researched, logical and thoroughly devastating take-down of Emirates and its unworkable business model.

But, given that that can't be: keep piling on the nonsense.

Xlr

Given the ownership of EK, EY, and QR, Tim Clark criticizing QR would be akin to Dubai insulting (in the Gulf culture) Qatar. And by extension criticizing Abu Dhabi too. Which is not a sensible thing to do, given that Abu Dhabi bailed out Dubai during the GFC and continues to give them a very good interest rate.

Read up on the contributions of John Nash (who unfortunately passed away recently). Particularly Nash Equilibrium. Pretty straightforward that the current situation of everyone staying quiet is in equilibrium - there can, of course, be other situations that are in equilibrium.

eternaltransit

The racism issue doesn't stem from the allegations of Qatar bribing their way to a World Cup, it comes from your extension of these allegations of Qatar apparently bribing FIFA officials - under investigation by the Swiss, not the US authorities, as you stated earlier - to then insinuate, no, actually, your clear statement, that Dubai's integrity is similarly lacking and therefore also EK and everyone who works there or has had a hand in this fraud that you allege is happening there, when the only thing they have in common is that they are both Arab monarchies that own an airline.

Just when I thought this thread couldn't get any more easily sidetracked, here we have an astounding new direction (which I will admit, I will indulge as I quite enjoy it) which has inferences which are easily debunked.

However, I can cherry-pick as well as the best of them, so here is my attempt to link FIFA to this whole thread:
From the BBC -
So...by the logic of Qatar allegedly bribing FIFA, can we say now that the US is also similarly corrupt - and by extension US airlines?

From the US Department of Justice -
What's that - a U.S. company engaging in illegal and corrupt practices? Say it ain't so!

So you see, the whole issue with FIFA is totally irrelevant when it comes to EK. When cherry-picking, it's just as easy to make any inferences you want if you don't care about context and evidence. We should just put that aside, as I think most readers have (or at least take it as at most a mildly entertaining diversion).

Before the point about "oh, they've all been indicted and jailed which is a difference to the Middle East", I would argue that it makes no difference at all - so what if the companies and individuals get caught: that doesn't erase the fact they actually did it in the first place!

It reinforces the point that penalties and a transparent regulatory regime don't deter or otherwise have any effect on a corporate decision to commit fraud or illegal acts, which makes judging EK solely on the basis of its operating jurisdiction a complete mockery of any standard of fairness or impartiality.

Not that I am condoning any such actions of course, and I think the whole "everyone is doing it so it's all right" defence is very weak, but really, for EK, where's the evidence?

The point raised that "EK claims to be completely clean so it has to prove it" is also flimsy at best - every company in the world that publishes accounts or even quarterly information reports (or market updates) is implicitly stating the same thing every time they do so, with their auditors' reputations on the line as well - no one wants to collapse like the Arthur Andersen scandal again. So once again - when EK (and its auditors!) does the same as every other company that publishes accounts and warrants it is telling the truth and its published figures are accurate, why does it not get the same hearing and benefit of the doubt as other companies around the world?

Back to your post:
I don't think anyone fails to realise that EK has a dual mandate - to sustainably operate and to promote Dubai. Neither one of those mandates dictates that EK has to maximise quarterly and annual profit margins, and I think that entirely within the prerogative of shareholders to accept what returns they want to accept.

After all, Dubai has no natural resources of note to offer anyone, so offers itself up as the most liberal and welcoming place in the Gulf (arguably) not just for expatriate life but also as a springboard for business investment in the wider region, similar to how Thailand did the same thing in SE Asia/Greater Mekong sub-region in the 80s and 90s. You see it in all the associated real estate and leisure projects that have been initiated and completed in Dubai.

EK is integral to that (especially judging by the Dubai commissioned research that shows the level of GDP that is dependant on aviation as a whole), and I'm reasonably sure that if EK, at this point in its life, got into financial difficulty, it would be offered a bailout/assistance from its owners. But I am also reasonably sure that if times got tough for EK, they would be able to manage the airline properly to cut routes and cut costs (the flexibility of an entirely leased fleet in action and mostly rented fleet in action - EK's leased A380s only costs 20.2M GBP/31M USD in rent costs a year each, after all) enough to avoid losing too much cash. And even if they did start to lose money, they have some cash reserves on hand, the ability to defer capital expenditure and are credit worthy enough to tap capital markets.

After all, its owners care about the airline paying for itself on a constant basis, not on making double digit investment returns, which gives them no angry analysts and shareholders to worry about. That doesn't imply that EK has been engaging in shameless and brazen fraud for decades by any stretch of the imagination. Well. Reasonable stretch