If one already achieves 85-100% load factors on routes with high demand, (I don't believe I need to link the EU, Australian and U.S. stats again) wouldn't any rational planner increase capacity to maximise total revenue and prevent spillage? (To lay people: spillage is the term to describe passenger demand turned away). Thus in the pursuit of capacity discipline you can if you are not careful shoot your self in the foot. Of course in protected low competition markets this is not as much of a problem as highly competitive marketplaces.

With regards to the comments by Pamela Ritchie and the "Dubai business community", if you are dismissive of verifiable statistics and plausible models of profitability presented to you here, why do you give any credibility to a person also not involved in the airline industry with no experience in it on a very tenuous, one might say paranoid-conspiratorial basis? "She can tell THE TRUTH so she must be correct"?

Actually horse driven buggies as you call them continue to improve in the same way the bicycle does. In yesteryear buggies were made from heavy metals and/or wood - now like modern bikes they are made from newer materials (alloys, plastics etc) which keep weight down allowing the horse to pull a ligther buggy faster and for longer!

But I get your drift!

The analogy doesn't entirely fall down though, horse-driven buggy experts are not the same as buggy manufacturers who just try and do what they think is best for their profitability goals :D

Take this buggy manufacturer which is doing something seen as madness by the buggy experts.

http://www.bloomberg.com/news/articl...wide-body-jets

And except QF who does fly A380's to DXB with 14 hour+ sectors. Bearing in mind, they also took the axe to a number of their underperforming international routes, but decided that DXB was a better place to deploy their A380's from Australia to LHR (with EK partnership) than SIN (with BA partnership).

They also happen to fly the longest current commercial pax flight, from SYD-DFW using the very same A380, with I assume somewhat limited O/D traffic, but lots of connecting traffic to AA. And these connecting pax probably are willing to pay a premium to avoid LAX when flying to/from east coast/midwest. Furthermore, QF commenced DFW services using a 744 after axing shorter SFO services (which they commented were profitable, but not as profitable as DFW service could be) and then upgauged DFW last year to A380. But they too, must be a scam! Operating A380's on such a route. Ridiculous.

I guess though, QF are not US based so they are irrelevant as far as this discussion goes, because if it doesn't work for the USA it just doesn't work anywhere.

Fair enough with regards to nonstop flights, but as has been pointed out before, revenue (and profits) is not the only objective of EK - the other objective is to grow the Dubai hub. The owner probably doesn't care if they get a lower dividend (as a percentage) of a larger pie, since anyone who buys a coffee in Dubai Airport increases the city's GDP, which eventually means more money for the coffers.

People don't usually go to Dubai with the intent of staying forever (though some do end up staying a very long time). You go for (a) Tax-free money, (b) Some experience working with different markets while still maintaining a decent lifestyle. It's largely a revolving door; people come and go all the time depending on how their home country is doing economically. It's different from, say, an immigrant to the US from NK/China/Iran, for whom leaving would probably be a feat in itself. Leaving Dubai isn't particularly hard; hundreds of people simply left their car at the airport parking lot and boarded their plane in 2009, never to return (plenty of news stories about this).

I have no idea about who believes Clark; my opinion based on the numbers in this thread is that Emirates is certainly profitable during the high season(s), and is probably profitable year-round as well. Operationally, I'm convinced that their hub-and-spoke model works for the routes they fly, and I still fly with them occasionally though most of my flying is domestic with UA these days. They still haven't formally responded to all the issues raised, particularly the fuel hedge novation (giving someone a bad fuel contract plus a loan - is that be a fair deal? Perhaps, it depends on the details). Until then, we can only really speculate as more news comes in.

I don't know if she is a racist or not, but I do know that she is no expert on Dubai and was close to clueless about intra-Asia and Europe-Asia dynamics during her time in Dubai or even at the end of it. There are lots of "journalists" whose career path is due to an appeal that has little or nothing to do with superior knowledge or ability to craft and communicate an intelligent message effectively with or for an intelligent audience knowledgeable about the subject matter.

I am more alarmed that they allow horses to drive buggies in China - where Moondog lives!

I will now add my two cents worth...

I work in aviation - do not have an aviation degree - and know a bit about EK... I have read whole thread but seldom contribute...

Based in Africa, I fly EK as my No 1 choice but prefer the EU airlines (AF, BA, LH) but they do not offer EK network or connectivity...

1) Is EK a scam?

I do not think so and am not convinced...

2) Is the playing field level?

I do not think so but when has it ever been so? I am sure EK gets some perks at DXB (perhaps cheaper GHA fees, discounted fuel, less onerous employment legislation etc - some of these perks are easier to ascertain than others)... But CX and SG have always had an advantage on employment legislation as they ensure stunning looking FAs whilst US3 employ old hags - I am being harsh and I agree many CX and SG crew probably envy their US counterparts' job security...

Solution

US3 need to embrace new world. The world needs more than one mega hub and is likely US will be home to at least one, if not two or three or more megahubs... The first of the US3 to embrace this may well flourish at expense of the other two.

Next steps

US3 - Stop complaining, embrace reality and compete!

My word, you're now quoting twatter as a source to back you up.

http://i.giphy.com/xPJAz3fc0phIs.gif

It's no surprise that the OP holds high and dear the word of journalists whose opinions line up with his. Then again mentions how the journalist holds a degree and had lived there for a short while, and that her opinion is credible not because of that but because she's out of the dungeon and can speak freely. <insert puking emoticon>.

I think the real surprise is perhaps how he attempts to establish credibility of his opinion based on investment expertise (which he put between quotes, cos you know it's not really expertise.)

Travelling to 50+ destinations should certainly be an eye opener for any one. It's sad that the OP waters down this travel experience and seeing the world, makes it less important than a phone call with a "financial advisor" (why does he need one any way?). :rolleyes:

This is the kind of thing bothers me. Even though EK's vertically integrated marketing team makes all right noises, there are handful of journalists and social media posters doesn't believe in it. May be their risky business model or they are too close to know more.

One such example, WSJ ME Reporter seems to believe EK has serious employee overload issues. EK vehemently denies such reports, but reporter wrote two separate articles about cabin crew and pilots. Same reporter during 2014 Google hangout questioned one hub policy comparing it to "putting all eggs in one basket"

Now this BNN reporter.

In the interests of being scrupulously fair to the OP and his idea that somehow bringing visitors to Dubai generates enough GDP for the government to continually fund EK secretly, coffee at DXB, if bought from Costa, also is direct revenue for EK as they are Whitbread plc's local partner http://en.wikipedia.org/wiki/Whitbread, owning/operating Costa and Premier Inn in Dubai :D I hardly think coffee sales and a hotel or two are enough to cover the billions of dollars of operating costs required to fund a global airline - the fuel bill alone is in the billions of USD!

That said, I think we've covered adequately the (im)possibility of GDP growth to fund secret cash injections to EK, given the tax take of around 13% of GDP for Dubai, a 2014 government deficit and Dubai government sovereign bond issues to fund the operations of the government - but to reiterate the point: why borrow from international creditors on commercial terms to the extent that debt levels are over 100% of GDP http://gulfnews.com/business/economy...owth-1.1283772, if you have the cash from your own reserves or sovereign investments etc. to fund the government and loss making enterprises, if you have the ability to conceal everything?

I certainly take your point about the tendency of corporate PR teams to spin a positive marketing message at all times - I don't think that's isolated to EK. For instance, the articles about overwork amongst pilots and cabin crew seem to be accurate - it was discussed in this very forum a few weeks ago, and even if this is anecdotal, you are increasingly seeing senior crew (SFS/Pursers) working now in economy due to crew shortages. Or, look on various internet gossip boards for aviation employees! I'm not sure if overwork allegations (and the denials from airlines) are anything new though: look at Ryanair http://www.flightglobal.com/news/art...itions-284370/,http://www.telegraph.co.uk/news/1510...w-fatigue.html or US airlines: http://www.startribune.com/local/208961821.html.

Clearly no airline, (or company!) would ever admit that their employees are overworked, and sometimes even take legal action with claims of slander or libel.

I think it's less a conspiracy of a state collusion-evil overlord organisation, and once again EK selling its staff (crew especially) on a glamorous lifestyle of relatively high pay and easy work, when the reality is quite different. Perhaps readers of this thread with family members as crew might comment on that.

As to how this reflects on whether EK is a financial scam or not - one could argue that an airline with unlimited pockets can afford to bribe away or shower cash on a problem such as overexpansion by attracting loads of new staff in a relatively short time frame :)

I do agree about the risk of the business model with the one hub model though, but disagree that implies that EK is funded secretly by owners. If a serious air safety incident or political/safety issue ever occurred at DXB, then I think it's likely load factors would plummet and not recover, given the amount of competition in the air at the moment (at least in some parts of the world :D).

That said, given most of the fleet is leased, and half of it is on operating lease, we can assume that the trust structure financing those operating leases means the package was created on a non-recourse basis, so during any downturn they can simply hand the planes back and only have to worry about the financial leases, bond issues and term loans to repay which are not as significant.

All of this aside - even if there was a will on the part of Dubai and EK to fraudulently misrepresent accounts and overstate revenue and understand expenses etc., we still run into the problem of, how would the conspiracy be financed?

If this was an airline backed by a government with deep petroleum or natural resources money such as Qatar or Russia, or a massive export economy like China, running massive surpluses for years, coming out of nowhere to establish a global network in a short time frame with state-of-the-art everything, then I think this thread would be much shorter and the discussion ending with a quick "yes" and we'd all be on our merry way. But Dubai? Given all the independent information out there which builds a case of why it's highly unlikely for Dubai to have the financial resources to do this and the verifiable data that is out there that builds a case for sustainable operations (using as little information that is reliant on Dubai and EK as possible) - then that I think leans us towards giving EK the benefit of the doubt, in that it is able to do what it says it is doing.

Still, given the margins and the debts - a risky business, no doubt!

Norm Coleman (http://en.wikipedia.org/wiki/Norm_Coleman), will be lobbying for EK, if this story is to be believed.

Story here: http://www.odwyerpr.com/story/public...ying-push.html

Edit: That's as part of Hogan Lovells. OpenSecrets.org (at https://www.opensecrets.org/lobby/cl....php?id=F47677) also gives us two names whom EK has engaged directly this year: John Byerly and Michael Korens. There is no data from past years, suggesting EK hasn't played the lobby game before.

Edit 2: That is, as expected, miniscule compared to:
Delta: https://www.opensecrets.org/lobby/cl...?id=D000000350
American: https://www.opensecrets.org/lobby/cl...?id=D000067697

Emirates carried 49.3 million passengers in 2014-15 fiscal year.

Airline scheduled to issue financial results today.

http://gulfnews.com/business/aviatio...year-1.1506563

Emirates Group also made a good profit which is around 1.5 billion USD.

Not bad for a un subsidized airline.:p