UA1K_no_more

If you follow your own advice, that explains why you're on FT claiming to be an expert while the actual experts have discussions elsewhere. @:-)

FD1971

Certainly not, but the ME3 are the only airlines claiming to be clean and profitable. Unfortunately, they are not subject to the same rules re. publishing financial information in comparison to the US3 or LH not to mention Ryanair, so basically they can claim everything like the GDR and SED.

Actually believing what they say seems to seperate two groups of guys, the fans of Supertramp and the rest.

Let me ask you one question, according to Clark there is nothing to hide, so why don't they just publish the information about the $2.3 billion in doing business with closely affiliated companies...

It is pretty easy, isn't it?

eternaltransit

Yes, I do think that people read those reports without thinking "these are absolute lies" - whereas EKs reports are read by some and discarded because "they don't trust them". (not talking about the situation where companies try and put positive spin on their results for public consumption).

I am not trying to redirect the thread away from EK - which is why I said I wasn't going to comment on why LH did what they did. For the record, I agree with you that what LH did was done in a totally legal way with legitimate reasoning - LH is going to use their owned planes longer, and so need to change their depreciation policy.

What I was saying is that EK could do the same thing, for totally legitimate reasons (we want to use our planes for longer - not going to happen I think as EK likes bright and new planes and they are all leased anyway) - that is, make accounting changes that benefit the company on paper, for completely valid and legitimate reasons and state "we are changing the depreciation policy to reflect the longer use of our aircraft" - and yet I can't help but think that the response would be: "no, that's a lie, they are just doing it to boost their results".

Given the previous point that the political and regulatory systems don't have a bearing on fraud, why is it acceptable to claim that EK is lying when they put statements in their accounts (such as, "we transact at arms-length with related parties"), but not acceptable to claim other airlines are lying when they put similar things in their accounts?

Edgerfly

I don't mean this question in a demeaning way, but if Emirates is a financial scam, why does that concern any of us?

I admit something does seem amiss, and I really don't understand how on earth the airline could be profitable. But that's really none of my business, nor do I care, unless there is some type of illegal activity going on. Until then, I'll enjoy my F suites, and showers at 40,000 feet.

EK is totally owned by the government of Dubai, so nobody in the public sector could be harmed- financially anyway.

eternaltransit

It's more subtle than that - the ME3 are the only airlines who are being accused of not being clean and profitable: most other airlines are given the benefit of the doubt when it comes to their reports and returns to shareholders.

However I think the argument "everyone gets subsidies so it's okay" is pretty weak and still doesn't resolve the whole double-standards issue flying around.

As to why they don't publish 2.3bn with related parties - actually it was alleged to be around 2bn in 2013/14 and 11bn over 10 years, but sure, that's the ballpark:

I would love it if these other entities were all transparent and published accounts - it would make everything easier. dnata already does, of course, so that simply leaves ENOC and Dubai Aerospace. Dubai Aerospace does report some results. Which just leaves ENOC. ENOC seems to be unwieldy state owned enterprise which doesn't yet publish, but should, which has to give subsidised fuel to residents by law - but that shouldn't be taken as evidence that Emirates is benefitting improperly. We've already gone over the plausibility that ENOC can provide subsidised fuel to Emirates in a previous post - put it this way, not plausible.

Clark is only President of Emirates Airline. He is not the controller and puppet-master of all Dubai. Neither is Sheikh Ahmed. Dubai, like other state capitalism based economies, is a collection of fiefdoms who are not going share information. It's not one monolithic entity where everything forms part of a whole. It's a feudal structure with power bases and petty rivalries.

And - how is it possibly right that one company has to now disclose details of private commercial transactions - that counterparties might not want to be made public because it will affect their competitors and dealings with their clients - but no one else does?

FD1971

Excuse me, but it does not really matter what you think about the LH accounting practices...as long as the owners of LH are okay with it and nobody files a law suit.

http://investor-relations.lufthansag...ting/2015.html

Judging from the information provided by LH, it does not seem to be the case.

If there is nothing to hide, why do EK hide all the information about all the affiliated companies they do business with?

Why do they need two years to answer, if all the major auditors approve all the accounts since decades?

They should be able to find all necessary info within a few days, right?

I mean the report is only 80 pages Long, not even all is about EK, and even you tried to explain some of the points within a few hours...

abaca12

Precisely. All the text, as noted by the quote box in which it resides, originates from the cited articles. As they are peer-reviewed content stemming from academia, I could easily demonstrated your statement to be factually wrong. That was the intent of my post.

You do yourself and this thread a disservice by engaging in hyperbolic and "spur-of-the-moment" quips that, while entertaining, are patently wrong, as exemplified by the example above.

Next, my personal opinion on the recent AMS/EK is irrelevant, as I will not be the next personification of the Dunning–Kruger effect in this thread.

As to de Wit's (article's) stance on whether "EK is clean" or not, the relevant passage is highlighted in red for the convenience of those reading the (wall of) text. Of course, you are more than welcome to share with us your rebuttal of his statements (or your own interpretation of the same), but I would recommend you get a hold of the original article and read it in its entirety if the quoted text in a thread post is not a suitable medium for you.

Speaking for myself, being on the sidelines and reading this thread has been very entertaining, but the discussion should strive to be as factual as possible (which, since we are engaging in speculation, I understand is difficult); i.e. criticism of Vespermann as a reputable source = interesting, grandstanding about backpackers = counter-productive.

eternaltransit

The owners of EK seem to be happy with the way they are presenting their accounts, their auditors are happy and no one has filed a law suit - yet people are accusing them of being frauds.

If it's good enough for LH (for example, I am not trying to single out LH), why not EK? Do you see my point here about the double standards?

-

Now, for someone who is referring to the GDR in their posts, the irony of using the line "If you have nothing to hide, you have nothing to fear" is quite staggering

I think the saying attributed to Cardinal Richelieu is rather apt here:
As to why "they want two years" - only QR wanted two years, EK did not ask for two years, as stated in post 1820: http://www.flyertalk.com/forum/emira...l#post24789289.

And why is it difficult to publish information - you realise the request is:
"Publish the commercial sensitive details of every contract and transaction with every single supplier you have, no matter what the supplier's view is on the matter". Do you think they are allowed to publish all of that information, unilaterally?

That is an outrageous claim to ask for - almost like saying to an airline: "publish specific yield, revenue and costs for every single sector on every route on your network".

Wait. I think that's exactly what the US3 asked the ME3 for...

FD1971

Edger, two really great points.

First and foremost, the individual who came up with the Survey really hit the nail adding the possibility to answer ' I do not care '

When they started growing their network (and debt... ) a lot of people within the industry starting looking at what was going on, also those who thought about joining them as an employee. The offers were good, certain airlines were in a slump (post Sep.11 until SARS) Dubai looked good on the first take, so the interest in EK grew.

The results were obvious, you formulated it very nicely, but there was simply no solid business case, just the desire to grow, grow and grow at any cost.

Some of us looked into the matter a bit more and discovered what became part of this discussion, a massive amount of affiliates, subsidies etc. trying to camouflage the real financial bottom line. (the typical scam set up )

Again, so far they paid for all their financial obligations, AFAIK, so thumbs up.

So the case was pretty clear.

To be entirely honest with you, the reason that the airlines were burning cash like crazy was probably also the reason why the LegacY Carriers did not really take them so seriously.

I can only assume that they thought they would run out of money, energy, planes, runways, people, passengers eventually..., which did not happen so far, so you can still enjoy the shower and Airbus can still build the A380.

sunseeker

after reading quite a few pages of this thread, i still find the only question important (to me, that is) unanswered:
why the hell should i care, whether or not EK is a financial scam, as long as i get a top notch product for reasonable money ??

FD1971

As pointed out before, most of the information published by the US3 was an open secret long before they published it...

In how far they can reveal their sources will be seen in the next couple of months and years.

I was fortunate enough to get a closer look at what was happening at EK,I was fortunate enough to talk to a lot of people who worked in the Gulf for some airlines, but so far I never felt the desire to publish an Insider Report or a scientific paper summarising other papers compiled by official sources only.

But I am sure you will find many papers pointing out how great Parmalat, Enron or Worldcom worked out...and yes they also only used official sources and documents, soemhow it did not really cut.

I do not know when you started reading, but at the beginning GUW quoted good old Klophaus, who wrote some pretty infamous reports compiled with official sources only about the potential growth of airports like Kassel.

FD1971

suny, how are you today? Did you bring the Milchbubi with you?

I always appreciated your rational approach to things, so indeed, why should you care? ^^^

iahphx

But we know with 100% certainty that there is NOT much premium demand for travel between the USA and India because, if there was, there would be a lot more nonstop flying: because, the world over, demand for premium travel creates nonstop flying. No one could plausibly dispute this. And if the US and Indian carriers somehow underestimated this demand (highly unlikely, but let's just suppose they did) the "success" of the ME3 flights would certainly spur the development of competing nonstop service. Instead, we see the reverse: the nonstop flights are exiting the market!

Again, this is why I started this thread because the behavior of the ME3 in ramping up USA service defies every basic theory of airline economics. It's like a physicist claiming the rules of physics don't apply.

eternaltransit

http://www.flyertalk.com/forum/emira...l-scam-31.html

Back in the days of post 461 - a long time ago! GUW posted a link to an article that quoted Klophaus.

FD1971

Thanks for the heads up, I will edit the post.

I did not intend to make fun of you, it was used as an example of a well-known insider (Klophaus not GUW) coming up with complete nonsense, because he was paid to do so.