Yes. And indeed that would seem more like charity than scam.

The article I posted in a recent thread here is a pretty good read that provides indications into why and how EK has been working its operations:

http://centreforaviation.com/analysi...ng-them-192141

The big auditing companies do audit factors beyond just what is stated in a financial report -- it depends on what they are hired to check/certify/report. ;)

This comment is certainly spot on. :D

Therefore, it helps to have the same guys do the job for a certain amount of years in a row. @:-)

Is Emirates a financial scam?
 

FD if you had any idea about the finances of Dubai you would adjust your theory. Firstly you have no evidence of any of your hypothesis just a hunch and secondly if Dubai was subsidising this (there is no tax in Dubai) it would appear somewhere. Dubai post the last financial crisis cannot afford to run at a loss and your example is only relevant when other stake holders pick up the tab eg tax payers. There is only one stakeholder here; the government of Dubai so it would make no sense to scam itself! It's a case of robbing Ahmed to pay Ahmed! The simple truth is that the overall apparatus makes money otherwise it would not be operated this way. If you have some hard facts would love to see them. If it didn't make money they would downsize it and allow other loss making airlines to bring tourists and business people to Dubai.

Post Enron a lot these conflicts have been removed eg several years of audit without a change and also no cross selling. It is in auditors interests to watch out for any irregularities as they are partnerships and as shown with Enron are at high risk if wrong doing is uncovered.

'load factor minus break even load factor' seems like it might be easiest to adjust by adjusting operations, maybe even late each fiscal year

dubai had to be bailed out by abu dhabi

GUWonder's link includes among other things brief mentions of financing and cargo

and re cargo, there are government (can adjust) customers for cargo, moreso than passengers i would imagine

Oil-poor Dubai indeed had to be bailed out by very oil rich Abu Dhabi. Abu Dhabi made sure to gets it pound of flesh from Dubai's ruling family; and as with the intra-Emirates rivalry wanted to cap it with a humiliating feather for the world to see.

Is EK scamming Abu Dhabi? If so, Dubai and EK would be in serious peril. Keep in mind this is all in a country that believes in debtors' prison. Is EK scamming its customers more than the U.S. or European legacy majors? No.

no shareholders to scam either

and anyone can play auditing games, doesnt require government

Is Emirates a financial scam?
 

Well one shareholder. Like I said its a zero sum game for Dubai so it's nonesense to say there is a scam as it doesn't hold logic. Add to that the AD oversight and the fact that Dubai restructured *all* it's loss making businesses post 2008 and I think the truth is a lot simpler than any far fetched conspiracy theory that benefits nobody!!

I strongly suggest reading my posts from some weeks ago explaining the zero sum game and how Dubai copied the approach by Western European Governments, to a certain extent also Singapore, to get itself on the (aviation) landscape.

Once again, there are massive differences between EK generating positive cash flows from operating their fleet, Emirates Group generating positive cash flows and the whole Dubai Aviation idea generating an economic surplus for the sheikdom.

As stated before, going waaaay into the red to establish the complete infrastructure is not unusual, however there is one difference.

Countries like Germany, Belgium or the Netherlands had other tools at their disposal while negotiating BASAs...and simply due to the fact that aviation in Dubai is on a different point on the time bar, a time when most competitors are clean financially, Dubai and EK do not have the luxury of being able to be open about their finances and all the subsidies are smartly used by lobbyists feeding the Governments in Canada, Italy, The Netherlands or Germany.

Again, we have a pretty good understanding how EK works, it is after all a copycat of the tricks used by many other airlines on the Government drip ranging from the UK and Italy to the Netherlands or Singapore.

So the main question is not really whether EK is on steroids, the main and most interesting question is what kind of service (including capacity) should be offered to make money from operating (long-haul) planes these days?

This is a nice overview for people without too much knowledge of the industry and describes quite nicely the work by people lobbying for certain causes.

Once again, one should not underestimate what happened in the UK in order to understand the actions by Germany, Canada or the US.

What the article does not mention at all is the point that the US pushed for Open Skies already in 1944, while the UK was against it. During the late stages of WWII and the following years, the US and UK were the aviation superpowers. Therefore, it is only ironic that the UK has opened up the market to Dubai (including massive slot 'trading' aka slot buying) while the US has a more conservative approach.

Unfortunately, and one could blame both GUW and the author of the CASA story for it, they quote good old Prof. Klophaus and one of his traffic predictions. Yes, it is the same Klophaus, who was ridiculed on German TV, because he wrote studies predicting millions of passengers at various tertiary German airports, airports that have around 50k pax per year and not a few million now...

The worst thing that can happen to you as an expert, somebody with a lot of money comes to you and asks you for a favour, which brings us back from the fields of Kassel Calden airport to the Dubai Creek and reports from the University of Worms to other beloved auditing companies..., both know better, but both came up with strange reports ingnoring obvious factors.

One has to give Klophaus a bit of credit though, his assessment that fifth freedom flights are not really a financially viable option for EK is spot on.

To understand the outrage by Anderson, one has to understand that Milan is one of the key markets for the Skyteam TATL JV, not only on non-stop services, but also through CDG.

One more important point to add; Emirates claimed that roughly 50% of the Milan-US traffic went via a hub instead of going nonstop, so they claimed that they should be allowed to fly the route, because there is obviously demand for it...

Only because there is demand does not mean that you can operate a nonstop flight vs. spreading the demand via hubs. Cities like Los Angeles from various points in Europe and even Miami are prime examples.

There is demand for sure, the demand would prefer to go nonstop, however nobody can make a nonstop flight become financially viable, well, maybe except a carrier, which does not have to make profits ;) , to quote Anderson once more. :p

Ad hominem attacks are so cute? Still so far off base from being logically sound and valid?

The audience for that organization's product is primarily industry insiders -- not those with little, or little care for, information about the industry.

Whether or not EK MXP-JFK service is financially viable, Delta's Anderson and those claiming "financial scam" may not be the one to know -- they've advocated for route attempts that flopped and engaged in firm management advisory practices that even wiped out some shareholders and/or fleeced various other stakeholders.

The pot calling the kettle black doesn't move me as much as it entertains me.

Once again, you confuse two major things.

You do not have to convince me or try to explain to me things and actions being undertaken by certain players in the industry.

I am just trying to explain to you and others how the industry work to understand certain comments better.

This thread is a beautiful example and judging from some posts here ranging from fleecing to the financial vialibity of ultra long-haul flights, I have to agree, it is actually amusing and entertaining.

But for me it does not stop there, making fun of people, because they are not educated/informed enough is indeed elitist and arrogant, hence I explain certain actions to people with less knowledge, simply because it becomes obvious every once in while that some more (basic) information helps them along the way.

You quoted an article that is strange, it contains lots of obvious things and is all about giving recommendations without really knowing what is going on, so most of the recommendations are not supported, quoting Klophaus has added insult to the injury.

Would it make sense for Delta to team up with somebody offering onward connections from Abu Dhabi or Dubai?

Absolutely!

Would it make sense for all airlines on the planet to have agreements with all other airlines at all other airports on the planet, including Virgin in New Mexico, to provide onward connections...(to space)

Absolutely!

Is it doable?

No, hence the talks between Lufthansa and Turkish as well as Emirates for most of the last couple of years did not really go anywhere...

Is this really surprising?

No, at least not for me (simply because we are not there yet, but we might get there)

But 'there' is not the point you want to have, because even a fully deregulated market (without fleecing to quote yourself) is not nearly what you expect it to be...

So complaining about the status quo (at Delta or the TSA) because you expect it to become better once Anderson or Delta or some TSA manager is gone is a bit childish like a kid complaining about the teacher being the main reason for his D in his last exam.

So nobody is blaming Anderson or the TSA, they are doing what is expected of them...just like EK is doing what is expected of them on behalf of the leaders in Dubai.

To come back to the original question about Milan-NYC service being viable year-round on a pretty expensive aircraft without feed....

There are not too many markets where 5th freedom flights would work, MXP-NYC might be one for 9 months of the year, but the losses during the off-season are mean ( streets;) )

What, exactly, are you trying to say here? (Are we still on the "scam" topic, or has the conversation moved in a new direction during the past several weeks? If the latter, please clue me in.)

;)

Two things, smart people say what they have to say, i.e. Anderson at hearings about financing aircraft for the NE3 by US citizens or EK claiming it is as clean as you can be running an airline. Obviously, the truth is often not even close and there are often more perspectives.

The second thing, GUW quoted a report with a certain agenda (which he did not see or simply ignored) which was not as good as he thought it would be, partly due to the reputation of the people quoted in the article.

The original question has been answered already multiple times, so it seems we are moving on with side discussions at this point; discussions like the viability of certain long-haul flights or the competitive advantage certain locations might have.