Good news for Emiratis; and brings the rest of Europe into line with the UK and Ireland who announced the waiver of the visa requirement for Emiratis (and for several other Middle Eastern states) 2 years ago.

Sorry, but you don't understand how hubs work.

You put hubs in strong o/d cities because those are the most profitable passengers. In particular, you want business travelers, who pay more for their flights than leisure pax.

Biz pax also like frequency, though -- remember, they pay for convenience. That's where the hub comes in. With a hub, you can connect other pax and offer the frequency that the o/d biz traveler wants. Without the connecting pax, there aren't enough pax for the frequency. It's a symbotic relationship, and is why hubs don't work without strong o/d traffic. It's why ORD works as a hub -- despite the congestion -- and Cleveland and Columbus don't (and are no longer hubs).


Well, the reality is that I travel int'l more than 99.999% of Americans, and I could safely wager that I've been to more countries than 99% of Flyertalkers (and probably more countries than anyone reading this thread). That said, quite candidly, this knowledge is only marginally useful to investing in the airline industry. Being a frequent flyer doesn't help me much understand airline economics. I can learn more from one conference call than 50 int'l flights. That is perhaps why there are lots of misguided comments in this thread.

You don't understand how horse driven buggies work. They are better than motor cars.

All horse driven buggy experts know that it is simply impossible to improve upon horse driven buggy technology, and I am an expert in the subject because I have a degree in horse driven buggy science.

The question this begs is: who is on those conference calls? If it is just US/EU based then you are missing a lot of intelligence. Your understanding of world economics seems limited based on some of your posts.

Many people would say that it is you who doesn't understand how hubs work.

You have this unflinching belief that a business passenger will only ever take a direct flight - and therefore that every city with a high O/D demand must be a hub.

But that's not how things work in the real world. (And it shows why the US airlines each have to have several "hubs").

You are continually mixing up the hub and spoke model with the point-to-point model.

A "hub" sits at the centre of the "wheel", and functions to connect passengers from all outlying destinations. An airline does not build a hub only to draw travel to and from that hub - it builds a hub to allow for many and multiple connections from the outlying cities, at the end of each "spoke". A hub does not have to have a large O/D market (and let's not forget that you vastly underestimate the O/D demand for DXB. More interantional airlines serve DXB than do any major US city. Check for yourself!).

A hub could be constructed in an artificial island in the middle of the ocean; and perform its function perfectly. Of course, this would mean that this particular hub has no O/D traffic; but a hub is built to allow connections to be made, and NOT to offer the highest slate of point-to-point destinations for the resident market based at that hub, as you MISTAKENLY continue to assume.

Therein lies the paradox in your understanding: you see a HUB not as a HUB, but as a strategically-positioned airport whose main function is to provide point-to-point service to the "important" people who live at the so-called "hub". That is not hub-and-spoke planning - that is point-to-point.

Of course, there will always be passengers who just want to travel to, or from, the hub; they won't need to connect. But the purpose of a "hub" is SPECIFICALLY TO ALLOW CONNECTIONS TO BE MADE AT THIS SINGLE POINT.

Emirates' model is cleaner and more efficient than any of the US3, who have multiple hubs.

ORD works as a hub for AA and UA, but it works just fine as a spoke for DL.

What you fail to recognise is that Emirates also has this "symbotic" [sic] relationship - and to a much greater extent than any of the US3's hubs. By concentrating all traffic on a single hub, Emirates attracts not only those passengers from 142 unique destinations that wish to travel to/from DXB, but also those passengers from those 142 destinations that wish to travel to another of those 142 destinations. With almost 45 million passengers travelling on Emirates in 2014, can you not see that there is sufficient passenger flow through Dubai to allow flights to be offered at a rate that is much higher than would be required by DXB O/D passengers (Dubai is no different than ANY hub in this regard).

What you say about frequency is, of course, true; but, apart from, say, London-New York, how many of the international routes served by the US3 are served with more than one frequency a day? As you know, frequencies are highest for short/medium haul routes; with long-haul destinations rarely served more than once a day. Business travellers do indeed prize frequency; but this really comes into play for short trips, such as there-and-back-on-the-same-day trips, or on brief stopover trips. No long-haul traveller expects an airline (outside of, as mentioned, highly-travelled routes such as London-New York) to have a high frequency of service.

But if you look at Emirates' planning, then they do provide a surprisingly high frequency on many of their key routes. (You say you're well travelled, but you seem very unfamiliar with large parts of the world, and perhaps have never travelled with Emirates). There are several banks of departures from DXB, all through the day, and all through the night. They are timed to allow easy connections (except, perhaps, for some of the least-travelled city pairings).

Emirates has up to:

• 8 daily flights to London, throughout the day, and can additionally tap into its partner Qantas' 2 additional daily flights, giving it 10 daily flights;
• 6 daily flights to Bangkok
• 5 daily flights to Mumbai
• 4 daily flights to Singapore, Delhi, Kuala Lumpur, Johannesburg....
• 3 daily flights to New York, Rome, Milan, Paris, Frankfurt, Manchester, Chennai, Bangalore, Hyderabad, Hong Kong, Jakarta, Colombo...
• 2 daily flights to Sydney, and access to Qantas's flight too, giving it 3 daily flights
• 2 daily flights to Amsterdam, Dublin, Düsseldorf, Hamburg, Munich, Vienna, Glasgow, Birmingham, Madrid, Barcelona, Zürich, Kolkata, Beijing, Shanghai, Tokyo, Manila, Nairobi, Cape Town, Cairo, Lagos, Moscow...

Maybe the penny is finally beginning to drop....

So my "expertise" here is on airline economics: I'm not an expert on Dubai. But there are Dubai experts, who confirm my belief that something is very wrong here with the math. Pamela Richie is a star journalist who works for BNN (Canada' CNBC), has a masters degree in Mideast politics, lived in Dubai and even hosted a respected business show there. This is her tweeted response yesterday to Tim Clark's claim that subsidies are "tosh":


"Hilarious! Of course, Emirates receives massive subsidies. No one believes you, Tim Clark. Pound the table harder."

https://twitter.com/ritchiepamela

So I suspect some of you folks will now make fun of her, too, as an ignorant, racist bumpkin?

Or US 3 could just operate 10 flights(1 each from airports you listed) to DEL and partner with Indian carriers for onward domestic connections. I am guessing at least 20 Indian cities have direct flights from Delhi.

I lived in Dubai for a bit, and I can assure you that people traveling to and from DXB are very profitable for EK, in every booking class. EK charges a premium for all pax who are Dubai O/D. It is not uncommon for people to travel on business every week, and businesses often have a preference for EK because they have non-stop options to most global cities - paying for convenience, as you put it. Dubai (DXB) is also a very congested airport.

Emirates has five A380s a day between Dubai and London Heathrow. The O/D demand between Dubai and London is quite strong, with lots of business as well as personal travel. Most pax are connecting, but I'm sure the business travelers love the frequencies as well.

On the US routes (except perhaps JFK), the O/D demand isn't that high. Which is why you see a higher percentage of connecting pax on those routes.

Perhaps Emirates doesn't "want" as many business travelers as DL, UA, or AA do. On routes that don't have the O/D traffic, they would rather fly the routes and be "ramen profitable" than not fly the routes at all. Which is reflected in their lower profit margins across the entire network. If EK stuck with a smaller network, perhaps they would have near DL-sized margins as well.



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Good find. She used to work at Dubai Eye 103.8 for the Tonight show (which I can confirm is a respected business show, people used to listen to it on the commute back home). But then, she probably doesn't know much about airline economics either, so why would her opinion matter to you?

Well, for a professional journalist, I don't much like her spelling skills.

http://i62.tinypic.com/2vjqtt0.jpg

How does this tweet confirm anything to do with the mathematics - given the same treatment that you gave someone for knowing nothing about "airline economics" such as the article you linked in post 1646, how does this person have any credibility given her reports are about "pharmaceuticals and healthcare", by your own standards?

http://www.bnn.ca/Personalities/Pamela-Ritchie.aspx

How does she justify the claims in her tweet?

I apologise for moving away from verifiable facts and into posts of a more personal nature, but really - can you not see the double standards/selective memory you are applying here?

Do you mean "strong o/d cities" like MEM, CVG, and CLE?
if you could learn that much from one conference call, perhaps you should start listening. @:-)
It's refreshing to see that you have started to mock your self-professed "expertise". That means that everyone in this thread agree that your "expertise" isn't worth anything.
And Sarah Palin is a "star politician" with a journalism degree...

I'm still waiting for you to answer the questions regarding your business relations with the US3 and how much money you have invested in US3 stock.
Answering those questions truthfully would reveal your true reasons for starting this thread, so it's no surprise that you avoid them.

I am, once again, in transit, so I was hoping someone would come along and point out the fact that "profitable biz pax" want convenience may in isolation be accurate, but that convenience does not always come in the form of non-stop connections.

For instance, if I want to go from London to Bangkok - I can take, say, BA, which leaves at 1500 and arrive at 0900, TG at 1230, arr. 0545 (2 daily now but going to 1 daily), or BR at 2135 to 1505. But what if I want to leave at 2200, or 1600 or 0800 and arrive at later times? EK can do that for me, so I can arrive and depart at times where I don't have to wait an extra day, to travel in time.

What if I want an F cabin that has closing doors so I can do private and confidential business work on board?

What if I want to fly to somewhere like LAD - non-stops might have a good schedule, but only fly twice a week. It is more convenient and flexible to fly on a daily scheduled flight, is it not? And yes, I would pay for a premium for that.
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There is this idea that only non-stop pax are profitable and everyone else is loss making - but I thought that the accusation was that because EK might have some loss making parts of its network, then it's a scam? How is that any different from carrying loss making pax to maintain viability on multiple higher yield routes (i.e. the same as any other legacy carrier in the world - just look at EU feeder networks to major hubs). It is quite possible EK may have loss-making routes, but you can't persuade me that EK is losing money on 5 A380s LHR-DXB a day given O&D fares and the load factors.

Perhaps the much more plausible explanation is that EK is happy to take lower margin connecting pax, but US3 airlines are not happy to sacrifice margins.

Yeah, I would assume the Dubai-bound pax are, by far, Emirates most profitable pax, and the frequencies are much appreciated. But every other airline in the world (except Qatar and Etihad) would fly smaller aircraft on that route to raise RASM. Note, for example, that AA flies high frequency A321T's between JFK and LAX -- a huge premium travel market -- with full int'l-style pampering up front because it wants the high-dollar revenue, but doesn't want to compete with itself for the lower dollar passenger.

As far as Pamela Richie goes, her opinion is important because she's a respected former Dubai business journalist who LEFT, and can tell the truth. Most of the "Middle East journalists" who report on this are towing the party line, which is of course what they either have to do or are predisposed to do. I think it's very safe to assume Richie still has good contacts in Dubai: if she says "nobody believes" Clark, I think that's strong evidence that many in the Dubai business community aren't buying Clark's tough-guy rhetoric. But I'm sure the apologists will dismiss her views as well.

Well, of course they could. But USA-DEL-3rd city isn't non-stop, which was, according to the OP, the only rational model:
USA-DEL-3rd city has as exactly many stops as USA-DXB-(one of the 10 Indian cities) which the OP claims is unprofitable. @:-) Ergo anyone offering USA-DEL-(other Indian city) is also a "scam".

This is what they do already - e.g. LH's India destinations. The problem is, the OPs hypothesis is that there is no money in it unless it is non-stop, so travellers here only have a choice of one-stops or more. To take into account a domestic hop then therefore makes the discussion about nonstop revenue moot.
Thus the question becomes would you pay a premium to fly on EK all the way with a one-stop in DXB on multiple daily frequencies or on a domestic Indian carrier to DEL (which is not as easy to transit at DXB) to take the one daily US3 service to the US or two stop via Europe?

I think one could then make the argument that living in a secondary city in India means EK can command the convenience premium so prized.