Nothing changed... headlines from the day after http://blogs.wsj.com/source/2009/11/...ewspapers-say/

And Abu Dhabi has announced that they will pick and choose where they will help out http://www.bloomberg.com/apps/news?p...K67kb0OA&pos=3

It was interesting to compare the National and Gulf News on Thursday - as its from Abu Dhabi, the National is a little more realistic. Either way, we may find out in time or we may not.

Who will those several enthusiatic buyers be?
A recession in Do-buy will spread and spill into its tourists traffic and income.

If you have been to Las Vegas lately you would have seen the abandoned hotels building sites and enjoy the $29/night hotel/casino rates...

The numbers of airplanes order by EK are large. Both Airbus and Boeing drew business plans based on those orders.
Order cancellations by EK will affect both Airbus and Boeing. Subsequently its bound to affect some local segments of the U.S. and European economies.

EK is a house of cards just like the rest of Dubai. Dozens of 777s and A380s -- like Dubai, EK is all about bigger, bigger, bigger and more, more, more. The first class suites, the showers -- all completely over the top. I fully expect that the likes of SQ, QF, BA, LH, AF, DL, etc. will eventually step in and pick up some of EK's 380s and 777s on the cheap in the next 2-3 years.

I'd actually say the airline is a bit better, the whole thing is leased. I was looking at a parallel thread on A.net wrt EK's finances. EK depends on financing of its aircraft, which just got a lot more expensive. EK also needs premium O/D traffic, which will also be reduced.

However, what struck me in the EK financial reports was that labor costs < 1/3 of the fuel cost. In the US its about parity (and in the rest of the world). If EK paid labor rates approximating those in the rest of the world, they'd be losing 10-12B AED a year(!).

EK doesn't require premium cabin traffic in order to survive in some substantial form -- it's bread and butter has traditionally been and will continue to be the economy class cabin and servicing LDC markets or acting as a transit center.

EK's labor cost arrangements are not going to amount to a labor price rise up to OECD country levels anytime soon.

The GCC region is likely going to see a big spike in oil prices between now and 2012; and that means its growth prospects will be returning in substantial ways, even if off a lower baseline than during the better part of the 2-3 year period prior to this one.

Let's just say the following about those people whom I trust to know the inner workings of the Emirates: they don't believe it to be a rumor.

EK is going to thrive, I am sure. Will Dubai lose control over them? Maybe. Does that matter much for EK? Probably not. Their business model is brilliant, and the A380s will bring their operating costs down further. I bet EK is making money in all classes of service - they are not a low cost carrier at all (my personal perception).

Will we see a merger of EK and EY? Only if Dubai is belly up and needs to sell EK to AD (if it happens, it will be at a fantastic premium). There is no need whatsoever for EK and EY side-by-side. EY will never make it to long-term sustained profitability with EK as a neighboring competitor. And AD knows it - and will therefore pay the premium, if required.

That's what people said about DW.
Making money in all classes? Are you sure? Who's going to fill the Y seats O/D once the workers from the Subcontinent have been sent home / are penniless?

Same here but it is hard to know exactly what is going though hence the caveat.

What is wrong with Aero-Charter Ukraine? :D
Something that is unique to EK is the geographical position of it's hub. (ET also has this advantage as it is only a few miles off). They have a wide-body only fleet and there are only a few island north west to New Zealand they could not reach with one of there planes.

And they have one of the largest wide-body/long range fleet (141). UA(121) AA(120) LH(110) AF(106) BA(117) SG(112) QF(77) .... The only Airline I found with more wide bodies is DL with 144, but they to many old (=inefficient) aircrafts (14years avg. fleet age vs. EK with 5.7 years) plus they have many 767's (95!!).

Depending on the 767 model DL would have a range of 3255nm to 5975nm. I could only count 8 aircrafts at EK with "limited" range: 4x 772 (w/o the ER or LR) and 4x 77F which have 5235nm and 4884nm range.
btw: ET has 32 wide bodies and 47 aircraft's in total.

Let me in let you in on something that the global airline industry has known for a long while. The stats you quote have very little to do with how profitable EK is or is not.

Fact is they have not genearted the revenue or profitablity to buy all the new birds. In actually, it's a mirage of financing deals that are now starting to crash.

It's been know for a long time the traffic, profits and cash on hand have never supported the expansion.

Now that the market is blowing up, EK will never be able to pull it off this off unless they get more backing. The expansion of EK was NEVER based on the traditional economics that most of the rest of worlds airlines were subject to.

Anyone want to take a bet on just how many 380's they will end up actually taking deliver of? Far less that the 58 i will bet.

That is nothing new and never a secret.

All this talk about EK crashing (financially) and how it's beyond common belief doesn't surprise me at all.
As far as I know Dubai World does not hold any stake in EK. So if one Dubai's largest companies is facing financial difficulties that doesn't mean anything.
Most of the DW finances were done internally (to the UAE); and it's only a handful of overseas creditors that will be feeling the heat.

As for EK's performance, there is nothing so far that justfies predictions of cutting routes, capacity, deferring deliveries, laying off workers, nor stopping their expansion plans (that are and were nothing short of brave).

EK might only be affected if a string of large companies in Dubai went bankrupt, taking with them important accounts, or if a large chunk of the world decided against coming to Emirates or against sending cargo with them. EK is still king and any talk about it's demise or shrinking is a waste of time.

Unless you can show how EK's finances are troubled, this thread is pointless. That's my 2cents.

That's the point though, innit? Nobody knows, because EK isn't exactly transparent about how it is financed, or how profitable it is. Once they put the cards on the table, we'll all be able to see much more clearly. Until then, the DW (Dubai World) debacle - where everthing was supposed to be fine and dandy according to the rulers, until last Wednesday that is - puts EK's "business model", which in military terms is rather akin to a "human wave" attack, in serious doubt.

"Traditional economics don't apply" - how true.

How true.


Read again and then again the post quoted above yours.
At issue is not EK. The puzzle is - how the "mysterious" owners of EK that include the sovreign, won't (couldn't), come up with the funds needed to service their debt. The implications to the business world are: when will the next piece fall in Dubai?