Originally Posted by
ung1
I'm sorry, but I find all your arguments unsubstantiated.
Let's start with the last one. You do know that Singapore's gambling revenue is greater than that of Vegas? It's a bigger 'Sin city' than Vegas, yet EK flies 4 times daily.
You mention SQ's 54% drop in profits. Please provide evidence this was due to a drop in service quality? Most people rank SQ as one of the top carriers service wise, and I find it hard to imagine a slight fall in perceived quality would lead to such a big change. Is the actual reason spiraling fuel prices?
Your point about EK being unable to provide crew housing is moot. Real estate prices in Dubai are very low at present, and EK just needs to rent an entire building or two. Alternatively, they provide crew with an allowance and they can find their own accommodation. I wouldn't call the standards 'luxurious' - yes they live in nice apartment blocks, but usually 3 to an apartment.
I agree about difficulty in maintaining quality with rapid expansion. But EK has been expanding at this rate for many years - perhaps you only notice it since it is now in the US. Their training facilities are stellar (some of us have seen them), and capable of dealing with large numbers of crew. The crew would not all be experienced, and that's where there's a shortcoming, but from a business perspective I think EK would rather build up a presence than worry about service levels - at least while they're still able to fill all those planes.
Let's go through your arguments -
(a) Singapore does not harbor the same negative connotation as Las Vegas does with gambling. The fact you stipulated may be true but many people don't associate "gambling" and "sex" when you mention Singapore (in fact, I believe that many people would picture the complete opposite). I am emphasizing the negative connotations that Las Vegas has from a layman's perspective.
In addition, Singapore markets its gambling to tourist indirectly. Unlike, Las Vegas which puts emphasis on casinos, casinos and more casinos and indirectly markets other tourist spots such as live shows, Singapore conversely markets its tourist spots first (Universal Studios, shopping, cuisine...etc.) before letting people know that it also has great gambling facilities. This is evidence that Singapore has no intentions of turning a country known for its order and peace into a region known solely for gambling (unlike Las Vegas). (see advertisements for Marina Bay Sands. Marina Bay doesn't emphasize it has one of the world's most glamorous casinos, it instead focuses on the family-friendly atmosphere and the plethora of activities that one could do while staying there with gambling being one of the many activities that you could do).
In essence, a movie with the title of "The Hangover" would most likely be shot and based in Las Vegas over Singapore any day.
(b) Service quality encompasses more than just cabin crew service. It includes food quality, pricing and economy, accessibility whether it be booking via their website or via a third-party. If you read through the SQ board, you will find that many people have complained about each and everyone of those objectives. In fact, many of the individuals in the SQ board attribute SQ's lost profits to the deterioration of the enumerated facts above. That is how I actually got that information.
(c) Free living in the heart of downtown Dubai is a considerable luxury. 3 to an apartment when you have your own bedroom is a luxury when luxury is anything that goes above and beyond what an ordinary airline would provide (which is NO living at all). They have set incredibly high standards to meet for future living conditions of other crew members. Simply being unable to provide living conditions downtown is a sufficient reason for other crew members who have to live elsewhere on the outskirts of the desert to whine.
Moreover, if you can read from my other post, I am emphasizing the cost of development not the cost of the land. An argument about real estate prices being low when my argument is centered on development cost is "moot."
I have also acknowledged the existence of EK's generous program to pay for their crew's living with a stipend. I doubt that a crew member can find an apartment at the heart of Dubai with free utilities without having out-of-pocket cost.
(d) Expansion at a high rate is always foreseen when a company starts from 0. There comes a time when an airline company must make careful choices in deciding the most efficient routes to pair with the best choice of aircraft. It is too clear in history that airlines who have blindly followed their ambitions and did not use their common sense have ended up in the gutter.
The best example I have in mind is Philippine Airlines (PR). As Asia's longest operating airline corporation under the same name, PR was once considered one of Southeast Asia's best airline companies. PR showcased rapid expansion throughout the 80s and unveiled an ambitious plan to infuse an incredible amount of capital into the company so that it could have Asia's newest and youngest fleet of aircraft + have the most new destinations out of all the Southeast Asian airline companies. It had dreams of making Manila a major international destination and airline hub. The ill-fated decision unraveled when fuel prices skyrocketed and the airline paired the wrong aircraft with terrible destinations. The death knell was the Asian Financial Crisis of 1997-1998. PR went into receivership and its domestic operations were handled by CX for sometime. In fact, CX even offered to purchase PR but PR refused by stating that the Filipino people would never allow their nation's flag carrier to be operated by a foreign company. This sad reality is now concluded with PR simply trying to survive and to claw its way back into merely becoming a profitable company.
I am not saying that EK's fate would come close to PR. All I am saying is that an airline who does not take due care in making common sense decisions and lets their ambitions blindly guide them will eventually falter. As shown by PR's story, any world event that is beyond the control of EK can smash its dreams. The only possible way an airline company can escape these unforeseeable events unscathed is to make sure that it takes a careful and more precise approach in its expansion.