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Originally Posted by FD1971
(Post 24813377)
Sorry, but you miss the point.
Illegal subsidies vs. poor service is not really the same issue. We all know that the whole US Aviation Infrastructure is underfunded since 30-40 years, mostly because all players are bankrupt or very close to bankruptcy and simply do not have the funds the improve the status quo. $42 Billion would help, in reality we are getting closer to a sum 3-4 times as high, if we include necessary ATC upgrades. Honestly, our airports are really pretty good -- like no stupid and annoying buses to get you to your aircraft from the terminal building. And they get better every year. In fact, as a customer, I'm more concerned by EXCESS spending on airports, as that raises ticket prices. I'm not looking for showpieces (aka, artificial rivers in terminals, monumental displays of art, etc.). I looking for efficiency. Governments everywhere seem to prefer monuments to efficiency, though, so it's obviously a challenge. The only thing that anyone can really complain about with USA airline travel are the unbundled extras ("ancillary revenue") that you need to pay (or have elite status) to improve your travel experience. Bags, food, better seats, boarding priority etc. It's annoying and feels chintzy. Undoubtedly, it's what drives customer dissatisfaction with the US airlines. The TSA doesn't help, either. But I'm certain that few are really dissatisfied by the physical airport facilities. Heck, even the USA airport clubs generally look very nice. There's not much food/beverage in them, but they look nice!
Originally Posted by FD1971
(Post 24813446)
Gäääähhhnnnn...
Flying has never been cheaper before, all US legacy carries were bankrupt at least once, because their revenues were not high enough to cover all their costs, but somehow people like GUW still argue that the airlines are ripping off the general public, because they charge $50 for a piece of luggage on top of that insanely expensive RT from the East to the West Coast priced at $299. And even worse, they decided not to award 100% miles on that fare... And the only argument people like GUW have.... it used to be different back in the days. Yes, it used to be different, in an era when all legacy carriers went bankrupt... A week ago we talked about common sense a lot... ;)
Originally Posted by moondog
(Post 24813794)
The poll came along several months after this thread started, and I'm willing to bet that the OP didn't request it.
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Originally Posted by iahphx
(Post 24816115)
I'm more concerned by EXCESS spending on airports, as that raises ticket prices.
... I looking for efficiency. Governments everywhere seem to prefer monuments to efficiency, though, so it's obviously a challenge. |
Originally Posted by iahphx
(Post 24815915)
A new letter by top lawmakers demands immediate action by the Obama Administration.
http://judiciary.house.gov/_cache/fi...signatures.pdf |
Originally Posted by iahphx
(Post 24815915)
While there is zero groundswell of support for the US airlines among the USA population (of course, there's no support for the Mideast airlines either), there is tremendous support for their position against the ME3 in Congress. A new letter by top lawmakers demands immediate action by the Obama Administration. I think it's almost a sure thing the DOT will do SOMETHING, given how ridiculous the ME3 are now behaving (thumbing their nose at America by adding lots more flights since the dispute began, while insulting the US airlines and their CEOs).
http://finance.yahoo.com/news/u-lawm...174603688.html BTW, I think the US airlines are planning another public event in DC tomorrow. They would be wise to produce more evidence of the subsidies to keep their momentum going. I'm sure they've accumulated more evidence in the past few weeks. The best evidence would be to show how these new USA routes can't possibly be profitable. Doug Parker should deputize AA President Scott Kirby -- aka, the smartest guy in the room and a revenue guru. One slide show presentation from Kirby on the economics of int'l flying and this "dispute" would be over. On the other hand, the ME3 aren't, "thumbing their nose at America," by seeking to open new routes. They may be fighting back against the US3 but you appear to be conflating the interests of these airlines with those of the USA as a whole. Boeing & FedEx, amongst others, might be inclined disagree with this equation. Again, one could argue that, simply because the CEO's of the US3 & their lobbyists state that these new routes can't possibly be profitable, doesn't make it any more of a fact than their assertion that the currently served routes cannot be running at a profit - as there has been ample evidence presented already within this thread to demonstrate this to be an invalid assumption. Sorry but nothing either you nor the US3, & their dossier of allegations, have presented so far has done anything to convince me that there is any factual basis for the claim that EK is either a financial scam or the beneficiary of huge subsidies. Far more a case, as I previously stated of draping oneself in the flag, in the hope that one's own interests will become conflated with those of the nation as a whole. |
In 1913, the question: "We are still looking for just one expert supporting the views of the EK fans on this board..." was asked by FD1971.
In the IAG comments in the DoT request for comments (and I think that IAG qualifies as "expert" considering their operational expertise and historical results): " Whilst IAG does not intend to make detailed points to rebut specific allegations in this paper, our own review of the published accounts of Emirates shows that it is a well-run airline that is profitable and makes dividend payments to its shareholder. Similarly, the UK Department for Transport reached a similar conclusion with Qatar. It has recently lifted long-standing frequency restrictions contained in the UK-Qatar bilateral on the basis of a satisfactory review of all information relevant to fair competition." So. There's one expert opinion about EK. Two for the ME, although I think the UK DoT doesn't really care about the cash injections into QR and simply wants extra competition in the UK market: so we'll discount that the QR conclusion for the purposes of this thread. In fact that entire paragraph of their response agrees with various posters on this thread providing points that support the idea that EK is not a scam, as well as also concurring with posters that the white paper has some integrity problems: The White Paper’s allegations on subsidies to Gulf carriers do not withstand scrutiny. IAG also has serious doubts about the way information is presented in the White Paper. It is heavily caveated due to difficulties in obtaining information. Yet, even where transparent accounts are available, many of the conclusions drawn appear inaccurate e.g. in relation to jet fuel subsidies or alleged fuel hedging support. Some of the arguments relating to IAG in the White Paper are inaccurate and misleading. Even where independent studies are used to support arguments, the evidence is deliberately misquoted to distort its meaning so that unfavourable conclusions can be drawn (“US white paper on Gulf carriers distorts my academic report”, Frankie O’Connell, ATW 26 April 2015). Such examples call into question the integrity of the whole document. More generally, IAG believes that: • Fuel subsidies to any of the Gulf carriers are non-existent. It is not credible to make allegations simply because the States concerned have large oil and gas reserves, especially when there is clear evidence that the carriers concerned have standard commercial contracts in place with well-established jet fuel suppliers. • Alleged subsidies in the form of investments in airlines, where they have occurred, are no different from the many investments made by States in airlines across the world in the past, or by governments elsewhere in the world, about which there appears to be no concern whatsoever. • State investment in airports infrastructure is not, and never has been, regarded as “subsidy” anywhere in the world. In the Gulf, as in the UK, airports are (regardless of ownership) run on a commercial basis and commercial revenues from retail and car parking in particular (as opposed to aeronautical revenues) frequently make up approaching half of the income of the airport concerned. This enables airports to attract business through reduced aeronautical charges. Provided charges are applied in a non-discriminatory manner i.e. all airlines may benefit from the same charges, under Open Skies principles there can be no justification for complaint. It is good business and it translates to lower airport charges and lower fares for passengers. There is nothing wrong in that. • The Gulf carriers are not protected from competition by their own governments. Competition at the Gulf hubs is fierce. This is the case in Abu Dhabi, Dubai and Doha. In Dubai, well over 100 international airlines compete successfully against Emirates and flydubai. It is one of the most heavily competed international hubs in the world, as well as the largest. • Complaints regarding lower labour and social costs could apply to many countries which the US has Open Skies agreements with, and reflect local market conditions and policies. The White Paper highlights a lack of trade unions in the Gulf States as a key issue yet OECD figures on union density (defined as the percentage of employees who are members of a union) for 2013 show that in the US these represent just 10.8% of the workforce, significantly below the OECD average of 16.9%. This compares with 25.4% for the UK, however IAG does not regard this relatively high figure as a legitimate reason to curb competition. • Similarly, local tax regimes e.g. corporation tax and income tax are a matter of national policy. Such matters are not within the scope of Bilateral Air Services Agreements and never have been. But that is clearly a different issue to injecting billions in cash secretly into the bank accounts of the company to cover any operational losses. So, is IAG an EK apologist, or on the EK payroll as an expert with an opinion-for-hire? Or is the allegation now going to be that Qatar with a 9.9% holding are now the defacto controlling shareholders of IAG and so are now making Willie Walsh lie in public statements? |
Originally Posted by FD1971
(Post 24813455)
Are you referring to the nice monopolies the ME3 operate at their airports?
I've asked before. Here's what BA says about the DXB "monopoly":
Originally Posted by BA's submission to the DoT
• The Gulf carriers are not protected from competition by their own governments. Competition at the Gulf hubs is fierce. This is the case in Abu Dhabi, Dubai and Doha. In Dubai, well over 100 international airlines compete successfully against Emirates and flydubai. It is one of the most heavily competed international hubs in the world, as well as the largest.
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Originally Posted by iahphx
(Post 24815915)
given how ridiculous the ME3 are now behaving (thumbing their nose at America by adding lots more flights since the dispute began, while insulting the US airlines and their CEOs).
Adding flights to the US constitutes "thumbing one's nose at America"??? |
Originally Posted by irishguy28
(Post 24816969)
What monopolies?
I've asked before. Here's what BA says about the DXB "monopoly": Even if we go with the the thesis, it's so implausible to veer into the conspiratorial-paranoid. Of course, he could be referring to mmi, which is owned by the Emirates Group - http://www.theemiratesgroup.com/engl...tlets/mmi.aspx, but that is not a monopoly. And even then, its accounts form part of Emirates' accounts as well - and clearly the airline's revenues at 80bn AED compared to goods sales and other revenue at about 3bn AED show you how minuscule that is to overall profitability. If it's now illegal or unethical to have diversified-conglomerate operations...memos had better be sent to corporate japan or Berkshire Hathaway :D |
I can't believe that's what he means; that would be a patently ridiculous point to keep making.
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US institutional investors in US airlines drive up ticket prices by 3-11%:
Originally Posted by Gulliver @ The Economist
The paper notes that the same five institutional investors are the top five shareholders of the largest airlines in America. It concludes that this common ownership increases airline ticket prices by 3-11%. The single acquisition of BGI by BlackRock—as we noted last year the single largest shareholder of around one-fifth of American companies—caused prices to increase by an average of 0.6%. Eric Posner and Glen Weyl, two law professors at the University of Chicago, do a good job of breaking out the implications over at Slate:
Competition among mutual funds cannot substitute for competition among corporations. Consider two mutual funds, A and B, each of which owns substantial stakes in the airlines. Both A and B benefit when the airlines fail to compete because they share the airlines’ above-market profits. The managers of A and B don’t need to meet in a smoke-filled room in order to hatch a conspiracy. All they need to do is reward the airline managers if those managers make large profits. |
Originally Posted by irishguy28
(Post 24817140)
I can't believe that's what he means; that would be a patently ridiculous point to keep making.
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Originally Posted by iahphx
(Post 24815915)
A new letter by top lawmakers demands immediate action by the Obama Administration. I think it's almost a sure thing the DOT will do SOMETHING, given how ridiculous the ME3 are now behaving (thumbing their nose at America by adding lots more flights since the dispute began, while insulting the US airlines and their CEOs).
In order for the Committee to better evaluate the allegations and the Administration's response to potential market distortions, please answer the following questions by May 20, 2015: 1. Are you aware of any foreign subsidies to the Foreign Airlines? a. If not, have you determined the absence of any foreign subsidies, and how did you determine that? b. if so, what will be the response to these subsidies, consistent with the departments' relevant statutory authority and state policies? The only insult is how your allegations and lies lack any form of intelligence. The kicker is that even that letter, the committee members refer to these as 'allegations'. Your view is that they're a slam dunk case, completely disconnected from the reality. |
Mod Comment
Folks, its time for everyone to take a deep breath and relax. The mud slinging and school yard antics are starting to wear thin. Zol and are putting this thread on hold for 24-hours. When we come back from intermission, if people cant be civil, then we will close the thread permanently.
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Thread Re-Open
Ok, here's the deal. The thread is now re-open. Please stick to the thread topic, no personal attacks, no politics, no teenage hysterics or arm waving of any sort. No wandering off into internet forum hinterland...
We will be watching ;) |
Ladies and gentlemen (heh), lots has happened over the past 24 hours. Highlights include an Etihad-commissioned study on benefits to US carriers due to the legal environment they operate in (all has been covered on this thread before, though not quantified to that extent), and a press conference by the US3.
Also, Lee Moak wrote for The Hill's blog: http://thehill.com/blogs/congress-bl...the-food-fight |
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