EK Fuel Advantage Thread (or not)
 

An interesting line from this article.....



Emirates hit by fuel costs, sticks with expansion

"Frankly we need more airplanes sooner to do all the things we want to do. For every route (we have), there's about five behind which we want to do and get going," Emirates' President Tim Clark said in an interview with Reuters Television.


http://www.reuters.com/article/2012/...84902V20120510

The UAE must have fuel that we don't know about. Seriously, "rising fuel cost" in Dubai is probably like $1.5 a gallon or something. Once it hits $1.75 everyone probably starts complaining there.

"Two weeks ago, Emirates announced a new codeshare deal with New York-based JetBlue Airways. That arrangement will tack an Emirates code and flight number onto JetBlue flights from New York's JFK airport to a dozen U.S. destinations, including Chicago and Boston."

Wow, so a couple months ago I said that EK would be smart to just partner up with an airline like Jetblue or Virgin America instead of flying nonstop to all those "domestic" cities. Look what they did. Smart.

My advice to EK - Don't fly to MIA or MCO. Let Jetblue handle that for you.

And what has that to do with the price of jet fuel?

Jet A-1 is basically Kerosene, which is derived from Petroleum.

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EK Fuel Advantage Thread (or not)
 

Yes, but EK's stance is that they purchase Jet A-1 at world prices, even though gasoline for cars in Dubai is cheaper than most of the world (but the most expensive in the region). So why is that?

they're all from the same derivative of crude. its the refining that cost a lot of money. The UAE may have a lot of crude but looking at what you said before, maybe they don't have a refinery that can produce enough for EK's demand?

Didn't Delta just buy a refinery in PA? I'm surprised EK would even buy crude at "world prices." I'm sure they have little to no tax on it which make all the difference in the world.

This is an excerpt from an EK "Myths and Facts" document, which is freely available online.

Emirates says: We pay the same price for fuel as any other airline in Dubai and in Frankfurt.

Lufthansa says: Emirates pays a low price for fuel at their hub in Dubai while we have to pay a higher price at our hub in Frankfurt. (Logically, any airline has to buy approx. 50 % of the fuel at the hub(s) and 50 % at the out stations)

The fact that Lufthansa pays the same price as Emirates for fuel in Dubai doesn't help to bring LH's fuel bill significantly down.

The fact that Emirates pays the same price as Lufthansa for fuel in Frankfurt doesn't help to bring EK's fuel bill significantly up.

I'm with EK on this one, because LH could just stop in Dubai again on the way to Asia as they had to do 20 years ago, even with full traffic rights beyond Dubai. Lufthansa Cargo or German charter airlines like Condor still frequently stop in Sharjah to stock up on cheap fuel. If Lufthansa decides to fly nonstop to Asia as a commercial decision, they should just charge a higher price to the business customers who demand the nonstop flight, and if the market doesn't accept this, then they are simply out of business on that route.

Yeah it's all about the taxes. That's why they should just buy their own refinery like Delta!

The refinery would only help them in dubai, everywhere else they would have to still buy fuel

You miss the point totally, even though EK did pay more for jet fuel (on paper) the UAE as a whole are making a killing with the price of oil exports these days. What really matters are the broader positives EK bring to Dubai, and the rest of the UAE economy. The seven Emirates function as one country, and people tend to forget that. The UAEs weakest link since the end of 2008 was the realestate sector, but it has out performed every other country since the beggining of 2012 so far which means the UAE are set to start they're next economic boom, and they're airlines will play a big part of that mowing down the competition.

The UAE also refine all of Irans oil, and with sanctions going into effect soon there will be plenty for EK. Why do you think they're building a jet fuel pipe line from Jebel Ali straight to DXB/DWC ?

Also most foreign companies in the UAE need local sponsors one way, or another so when you read between the lines when it comes to jet fuel you'll better realize why the legacy airlines are crying foul (slush funds), but they can't prove any thing. The oil companies are also more than happy being registered in the UAE because of the tax free policy, and not having to show any body they're books.

Just like all roads lead to Rome in the past, clean/liquid corporate money is making its way into UAE banks. ;)

This thread should be a busy one with all the expasion planned in the future.

Nothing to do with that. All airlines refueling in Dubai airport pay the same prices. Emirates does not recieve any subsidy on that.

Refineries does not necessarily mitigate the risk of price increases as refineries have both positive and negative margins. If Emirates enters into the refining business they still have the risk of incurring losses from the refinenry which can calculate into double losses.

The pipeline from Jebal Ali to the airports is a logistical solution to transport the jet fuel from the point of receipt which is Jebal Ali port where it is received and stored to the airport rather than using road tankers. You are the one missing the point totally.

People please understand the below facts from a fuel expert:
1- Dubai is tax free? Yes, for Emirates and all airlines. So other major airlines bad luck. Deal with your governments not with Emirates airlines, your nagging will not force Dubai government to impose taxes on other airlines.
2- Emirates gets fuel subsidy? No, the previous article from jet fuel marketers in dubai airport proves that. Any auditor who knows the oil prices can confirm that from checking the financial statement.
3- Owning a refinery does not make you get lower prices for fuel. It is a totally different industry which has its own risks. Good luck delta!

Emirates did not excel because of subsidies. The service, the convenience, the innovation, etc etc all made Emirates grab their passengers from other airlines, That's why it can be profitable why others struggle to survive.

I know the pipeline will be for logistics purposes cause there's no refinery for jet fuel in the vicinity at the moment. Just by interest how much will EK save just by doing this ?

Any chance they will extend the jet fuel pipeline to the Indian Ocean aswel ?