FD1971

eternal, I really do not care about EK and Dubai and whether they lose billions or not and believe in a monarchy or socialism

I just cared whether their approach to flying is something other companies can us in order to become more profitable, the answer was clearly no and since then the case is closed for me and many many other folks, who looked into the matter with the same intention.

But I also believe in a more educated society, so helped out some of the guys in this discussion by pointing out obvious facts (at least for insiders)

That's all.

GUWonder

Sabre and Amadeus indeed have useful data, but they aren't the NSA, GCHQ and BND combined.

Each C&F fare ex-Germany involve €100 going to Sixt? Sounds like another fairy tale. But if there is evidence to present that to be the case, it would be news to some Sixt exec.

For US3 and EU2/3 industry apologists engaged in self-dealing, "low fare" is whatever they want it to be for propaganda purposes. The objective of using such propaganda language is not in educating or becoming educated, rather it is in hoodwinking the public for their own narrow interests.

FD1971

Be careful @:-)

A 1000 fare on a nonstop flight lasting 5000 miles is different to a 1000 fare on EK (with a detour via DXB resulting in a longer stage length)

You would not be the first one falling for this trap...

Dave Noble

perhaps you just need to look at his details which refer to "Post Padding silver elite" and decide whether to continue feeding

Is there really any arguments left other than

yes it is
no it isnt
yes it is
no it isnt

?

GUWonder

Makes sense if anyone fell for such trap. But no one here fell for such trap. Talk about diversionary traps.

A fare is a fare. Costs arising from delivery of contracted services arising from sale of fares is not a fare.

eternaltransit

Historically, Dubai GRE debt was mainly centered on Dubai World (3/4 of Dubai's debt). I haven't gone through the historical Dubai GDP figures, but put it this way, in 2008, GDP was 85bn USD, and in 2009, Dubai World's total debt was 60bn. So we're looking at a ridiculously leveraged sovereign (over 100%+ of GDP borrowings).

The GFC bailout was essentially a replacement of 20bn USD of liabilities to commercial banks with a facility from the UAE Central Bank and Abu Dhabi, which pretty much will get rolled-over until Dubai has enough money to pay it back slowly. Given GDP approaching 100bn in 2015 with total debts around that level (140bn refers to debts of Dubai and the northern Emirates as well), the devil is in the details of exactly what the repayment schedules/bond maturities are and balancing cash flow/refinancing to make it happen.

Amongst all of that drama, the question is - how feasible and how rational would it be to siphon off cash secretly to give to EK, especially because it isn't one big cash register, but actually several entities, such as Dubai World/Nakheel, or Dubai Water and Electricity, as well as the sovereign itself - each of them with their own fiefdoms and rivalries and immediate liquidity demands. The level of collusion and coercion required to secretly transfer funds to prop up a fraudulent EK just makes that whole scenario really quite improbable. Much more realistic is the scenario where EK doesn't actually need secret funding.

FD1971

You forget one thing...(Bolding is mine)

I cannot wait for the Coen Brothers Express from Fargo, MN

irishguy28

But there are no non-stop flights on FRA-SYD, FD1971!

Of course, the stage lengths for stopovers in ICN are almost identical, and a little less so for SEL and TPE, but the "detour" via DXB represents only an extra 245 miles compared to the non-stop (10494 miles vs 10249 miles). TPE is the smallest detour: 93 miles; with Incheon next at 238 miles; then Dubai on 245 miles; with Narita being the biggest "detour" at a whopping 432 miles (or just 4.2% of the straight-line distance).

Still, given that EK has so much greater costs given the imbalance between the stage lengths - don't you think the extra €1,500+ they charge per J pax (in my example of CI/JL/KE vs EK on FRA-SYD as shown above) might go some way towards covering the costs???

Or how much is their benefactor subsidizing this ticket that EK sells for 50% more than the cheapest on the market?

DYKWIA

I notice this post was conveniently ignored

eternaltransit

I agree - I don't think anyone who is out to make lots of money should copy EK, given their poor margins and local competition who have the same geographic advantages but cash to burn, especially considering other airlines in more developed markets can make 10%+. Given the return potentials across the world, there's far more lower risk and higher return opportunities out there.

I just don't think that it then follows that EK is lying to everyone about their performance and think it's perfectly fine for companies to make 1,2,3,4,5% margins if that's what their owners are happy with.

FD1971

Are you playing insider now?

Wow

Do you have access to Sabre or Sixt data?

Another fairy tale in the making...

What about switching from Keep discovering to Keep fairytal....

eternaltransit

I'm going for gold!

Plus, slow day at work

It's not really the arguments, I think it's more sometimes the OP comes up with some "new" position or story which needs to be debunked

FD1971

Whatever floats their A380 will be done in order to get more gateways ex Canada, the US, Germany or France. As pointed out before, Qatar seems to be smarter, but they need space to store all the Raffales and Leopard tanks somewhere...

I guess they can use all the soccer stadiums after the WC after all.

Probably a profitable solution for them.

Enzokk

Interesting, thanks. I did read a article about how leveraged Dubai is and how the Emirate, while trying to learn their lessons from the GFC and the property bubble that caused their problems the last time, are trying to learn from the past. This means they seem to be a little more protected if another GFC should occur, but there are still dangers that the Emirate is exposed to, essentially because it doesn't have the natural resources of Abu Dhabi or Qatar.

I also find it more plausible that EK isn't taking money away from the Emirate of Dubai, just because there isn't money to throw towards the airline. The question asked wasn't, did EK receive subsidies, it is if it is a financial scam at present. Nothing really points to it being a scam, unless the ruler wants to go out in a blaze of glory and be bankrupt, but have a "profitable" airline to show for it to brag to his cousins.

FD1971

BA is interesting, especially the comments by Clark in the interview posted recently.

He is brave enough to praise Open Skies and the BA in the same context..., which is amazing considering that BA is only alive due to Bermuda and the fact that most of the IAG profits result from highly regulated markets in South America...

Next time I see him at a conference, I will give him two presents, a nice fleece shirt and a copy of Arabian Nights.