Dubai overtook Heathrow as the world's busiest international airport last year.

If the OP has trouble accepting that a "backwater" like DXB with little or no appeal (apparently) to visitors, tourists or business people, can be a hub for so many passengers, perhaps (s)he should consider an analogy with Atlanta.

ATL is the world's busiest airport - despite the city it serves being only the seventh-most visited city in the US, and despite only appearing 12th on the list of US cities with most overseas visitors in 2009-10.

Atlanta, like Dubai, thrives on connecting traffic. The difference is, though, that most of Atlanta's is domestic, or at least within the Americas, while most of Dubai's is intercontinental.

OP, I think it's unfair of you to make insinuations that the members of this board are blinded by some sort of airline jingoism - no one here, I think, and I certainly do not, have any vested interest in whether EK succeeds or fails. No one here "doesn't want to hear it". In fact, some posters, and I will include myself in this, have in fact stated they would be interested in seeing the report.

It's important to see the report in context as to what it is: it is part of a concerted lobbying effort by 3 major US legacy carriers to try and restrict competition. It is clearly by no means neutral, written by entities with a clear vested interest in promoting their agenda. It is disingenuous to try and claim that these three airlines are doing a public service by shining a light on economic injustice. What it does is exploit an apparent lack of transparency in these foreign entities (and reluctance, I would say, on legislators' part - they have better things to do - to do research: in fact as anyone who studies US political history should know, part of lobbying is to do the "research" for the legislators so they don't have to. Or look too deeply...) and try and shape the public or at least, Capitol Hill narrative to make it look like it's "unfair" and "hurting America".

The report is designed to be a propaganda piece wrapped around some kernel of facts dressed up as Truths. But the detail is of course in the context, and how they have done their research. Of course if they have compelling evidence such as secret recordings discussing direct bailout/subsidies of EK, internal documents from EK showing revenue per flight that doesn't add up to their books, then this would be a different story and incredibly interesting. But I suspect that if these airlines had any of that information, they would have already filed legal complaints, or had the US go to the WTO. However, the fact they are approaching Administration officials and legislators talking about Open Skies is telling: such is the way of lobbying - and that is what I mean by non-neutral. It is in fact also telling that the 3 airlines are purporting through their image ("look at us, we're three major competitors, and if we're coming together it really means this is Serious!") to represent American aviation and America, but JetBlue and Fedex, and other airport operators are vocal that Open Skies is a benefit to them and America.

Another point about the non-neutrality of this report. The leak of the information - that the report exists and this headline grabbing number of 40 billion - is designed to cause public consciousness impact. It's there to sway opinions in the lobbying battle. In the absence of the report though, let me make a couple of observations, which I would be happy to correct if and when this document actually gets released. It talks about massive subsidies and state support:

but relies on readers to infer that the subsidies and state support come from the owners of the airline. A natural enough assumption you might think?

However: perhaps in that subsidy calculation, the heads of these airlines are talking about Ex-Im Bank credit guarantees to help the financing of Boeing jets.
http://en.wikipedia.org/wiki/Export-..._United_States. So perhaps these Gulf carriers are actually being subsidied by the US taxpayer! Does that make it a scam, when by US law, the Ex-Im bank exists to support American industry (even though these is criticism a lot of that support goes to Boeing - is Boeing a financial scam?). Have the report authors simply taken the total cost of a massive Boeing order, taken a proportion to be assisted by the Ex-Im bank and classified the whole list price of the order as a "subsidy"?

However again - that lumps in all the carriers together. We're only talking about EK in this thread, where they have a report/breakdown of who finances the assets: and Ex-Im finance doesn't form a significant percentage of assets. Some of those financing partners are public entities (e.g. Amadeo/Doric aircraft leasing).

So perhaps they are lumping the idea that as ICD owns Dubai Airports and EK, then building DXB is actually subsidising EK. But we've already gone over that in this thread.

We can't know until we see the report of course, which is why, OP, we are all actually very interested to see it - and I think everyone here is more than willing to change their minds if some concrete evidence is produced. But this release of the existence of a report authored by three US airlines with a clear vested interest in promoting their own interpretation of what's happening in the aviation market is not concrete evidence until it's published in full, with methodology and sources. Until then it's a puff piece designed to sway opinions using insinuations and prejudice - and if I may test the boundaries of the FT rules, I think you have fallen under that prejudice spell unknowingly, OP, when you talk about an "authoritarian Middle Eastern country" and "cooking the books". We talked about this earlier in the thread: there have been countless corporate scandals involving publicly traded entities in democratic societies with a decent civil justice system with regular independent auditing: Enron, Olympus etc. etc. Whilst you are perfectly entitled to believe that EK is unprofitable on your premise that ULH is unprofitable and no one flies on them, you then move onto the idea that it's more likely to be fraudulent because it's based in the ME - and that is unfair and relies on unjustified stereotypes that would vanish upon closer inspection (that is, the ME is not a special case of corporate corruption, it can happen anywhere and has happened everywhere)

If they were cooking the books, why would they even bother publishing reports when EY and QR don't have to and still have Open Skies access?

I do however thank you OP, for continuing the life of this thread, and coming back to argue your corner :D

I think iahphx is WAY too much in his US-american corner, not able to see there is a world outside of his country :D

Is someone going to investigate the big 3 US airlines for: funding a corporate espionage scam against EK, EY and QR; bribing (or otherwise dangling inducements in front of) US officials; and/or threatening US officials?

Is someone going to audit the claims in the "report" to check out how much of a scam this DL/UA/AA "report" may be?

The 3 US industry cartel kingpins are indeed shameless, as was mentioned in that article.

But - he hasn't made any credible argument, other than he feels it in his water, and it ain't like the good ol' US of A.

I use the term "argue" quite loosely :D

I'm also surprised that we've launched straight into a discussion around the article, but not actually what was stated in the article OP linked...

OP, what do you think of this part of the Wall Street Journal article that you linked that states:
But then you state in 491 they need more O&D traffic? We concede this traffic is of course, low yield, as the article states:

But we showed earlier in this thread that even low fare traffic can make a route break-even/generate profit (even if it's only 4-5%, not the 11-12% that other network carriers can achieve).

Wait! US carriers are complaining that other carriers can set prices freely? Wait, what? US carriers want regulation to make sure there's a minimum price for fares? Who's side are these carriers meant to be on again? Doesn't seem like American consumers...guess that's why they are doing a Capitol Hill PR campaign, not a massive PR blitz across the country...

Oh...this is interesting:
Cynically tying together their loss of market share on these routes (which form a small proportion of their traffic by their own admission) with tugging-on-the-heartstrings scaremongering about off-shoring jobs....sounds like a move out of a PR/Lobbyist playbook - the US has a protected domestic market by law - no cabotage. How could all those jobs be shifted overseas anyway...

Perhaps it's much more to do with, these carriers know their product is, by comparison awful, the network effect is lessened due to Middle East carrier tie ups with domestic competitors (Jetblue and EK for instance) and QR joining Oneworld... - so no one is going to pay these low fares and fly them if they have the choice. They could sustain a route with low fares - but only if they get high load factors similar to the other ME airlines. But who in their right mind would fly one of these US airlines for the same price as a better product on another carrier?

How do we ensure that at low load factors we can make money? Either cut capacity so people are forced onto your plane or push the prices up - but that only works if you can force competitors to put the price up too. One solution - push out the competitors and their seats, so all the prices go up: because of no capacity, you are then forced to fly DL/UA/AA (and their alliance partners, of which they get codeshare revenue)...and fares go up because of "high demand". Genius! All you need to do is exert a little political pressure to put up some protectionist trade barriers.

They give it away here:
Now who's running a scam...

I don't think anyone is saying they don't want to hear. On the contrary this thread is providing entertainment. However, so far we don't see much evidence and many good questions in response to your statements have been ignored.

BTW it can't be an audit unless they've hacked into the accounting and management systems of the ME3 airlines. Assuming they haven't done such illegal activities, at best the claimed subsidy is based on analysis of public info plus a lot of assumptions which may or may not prove to be valid.

The India reference is interesting. Didn't AA try ORD-DEL and give up some years ago? Of course that was a longer flight than some of the EK ones and also suffered from a lack of feed from other cities (except at US end).

And if indeed these three airlines have paid for an extensive corporate espionage campaign, I would think that investors would be unhappy at a clearly incredibly high risk and inefficient use of shareholder capital...

Putting on my aviation industry speculation cap on for a second, I would think that major network carriers in the US are looking enviously at this economic and demographic growth in South and East Asia and are looking to capitalise on the obvious demand for US travel from those markets - and are frustrated that they can't tap into it, because these other carriers are much more popular.

They can't compete on price because of structural differences in costs, and if they could compete on price, I think in their heart of hearts, they know that they have an inferior product on those routes so can't charge product premium. They don't have secondary city coverage in Asia, so have to provide a multi stop (using partners), compared to a one stop service, which reduces their yield and total revenue to them as they have to give some revenue to partners - and the corresponding reverse situation, secondary destinations in the US, aren't really in demand from Asian originating pax: they want to terminate in cities like JFK, ORD, LAX. For everything else they have partners like Jetblue.

Eternaltransit --

You should wait until we see the report. You obviously will not be convinced by the mere implausibility of Emirates' supposed financial success.

Yes. And DL cut back service to India too. The excuse in the end ended up being high fuel prices, with ultra long-haul flights hit extra hard by that. But even when fuel prices were lower in real terms than they are now, UA eliminated some India service also.

The 3 US airlines are having a hissy-fit because of the impact of the GCC 3 on routes to countries these airlines don't serve or have cut back serving. These US airlines' games must please some of their EU cartel kingpin brethren.

I certainly look forward to seeing the report, and I hope it isn't buried - I suspect it won't lay any of the arguments to bed but sustain a new round of new discussions :D

Regarding EK's finances: I think Emirates' operating model is difficult to sustain (it requires a gamble on future demographics and economics), has a low margin of error (as it flies expensive - and expensive to run - planes) and low profit margins (both by working things out using independent data and by their own accounts), but I think it's simply a commercial operation that is highly capital intensive and not very profitable in percentage terms, rather than implausibly successful.