Originally Posted by
TENYKS
I'm seeing many EK fares from eastern Asia(Japan, China, Hong Kong, Korea, etc) to the US(JFK and ORD) for about the same price as DL/UA/AA TPAC fares.
Flying on EK via DXB adds 5 or more hours to the flying time, compared to just flying across the Pacific.
How does EK manage to offer such fares? 5 extra hours of flying time, or 2000 extra miles, cost them a lot more fuel, doesn't it? Or are they just trying to capture the market and get people used to flying through DXB between eastern Asia and the U.S.?
As
irishguy28 has touched on, there's two interconnected issues here: pricing on routes, and the overall profitability of EK's operations. He has thoroughly given many of the perspectives into why pricing varies over routes (connection/direct premium, attempts to get share, source market's ability to absorb higher prices) so all I want to add is how EK can offer competitive pricing and still most likely end up more profitable than the other carriers on the routes.
The graph shows EKs cost base being low compared to competition (LCCs aren't their competition) - they benefit from a newer and therefore more fuel efficient fleets, a lower employee cost base (no need to bump up salaries to take into account tax - their pay offer is basically the net take home pay), higher resource utilisations (planes don't stay at base for very long and crew rest periods are lower than comparable legacy carriers). Even their fixed costs are lower: EK being one of the biggest customers for Airbus and Boeing jets, as well as a solid profitable track record means they get both the biggest discounts on new planes and some of the best financing deals all round (for instance, the latest A380s cost them about 230-250M USD through their leasing partners and list price at the moment is 410M USD).
So yes, EK don't need to make as much money per kilometer they fly to still be more profitable than other carriers on their routes.