The same could be said about airlines generally. Not many have made a decent return on capital over the long term, unless they've found a sucker to buy them out for an inflated price.

As you're online, perhaps you could do us the courtesy of responding to to questions put to you?

My post #511 for example.

Has anyone been able to obtain this report? It should be a really interesting read. the article claims it is freely circulating among congressional critters and DC lobbyists...

It is not surprising that the USA airlines would be cutting back service to India given the number of Middle East seats being dumped into the USA market. There are few other logical passengers for these Middle East seats from the USA than connecting pax to the Indian subcontinent. This is obviously having a detrimental impact on USA-India yields, making the flights certain money losers.

This is, of course, what Emirates cheerleaders here fail to realize. If there was really money to be made flying high volume, low fare traffic to India, a US carrier would buy A380s, configure them high density, and fly them nonstop from their hubs. Nobody would choose to connect in the Middle East if they didn't have to. Given the efficiencies of the USA airlines, they could certainly offer these seats for the same cost or less than Emirates' connecting service. The fact that this service doesn't exist would tell astute observers that something is "odd" about the economics of the Middle East airlines.

Pretty much the opposite.

EK can finance those shiny new planes at incredibly low rates. Why? Well, because global rates are extremely low. Stable countries (and companies) get credits for close to 0% interest, some countries even make money by taking debts.

Also, EK's planes are exactly the opposite of thirsty monsters. Those fancy A380s and 777's are among the least-thirsty planes you can get. Compare them with thirsty B748's or ultra-thirsty A340s that some competition (like LH) bought in the dozens, it's no surprise EK has lower fuel costs.

EK is successful because they play economies of scale correctly.

Cheap new planes, less fuel costs, relatively cheap labour, strong Hub, very decent onboard product making people willing to pay more, good brand strategy etc. - basically EK is for airlines what China is for countries. Long-term strategy. They started with low-fares to attract customers, at a time when oil was relatively cheap and could still run a profit with it. Growing brought scale effects, which they could keep as they kept growing. Newer planes meant less fuel costs, and staying an attractive airline while slowly increasing fares. Now they're not much cheaper (and in some cases more expensive) to fly than the "traditional" carriers, yet they still are more popular to fly to.

You're becoming annoying now...

Are any of the American carriers' routes to the Middle East profitable, iahphx? Which routes, and which carriers, are making money and which are losing money?

Thanks.

If any of the routes are loss-making, why do they continue to serve that destination?

Indeed :D

In yet more breaking news: Sun will set today, expected to rise again tomorrow

Apologies if I wasn't being clear - I meant only that planes are in absolute dollar terms expensive and expensive to run, when you compare on a very simple basis to other companies who make better or similar margins.

You are correct of course that the financing deals that EK gets are cheap: on the order of 5-7% coupons on the bond issues, and leases with similar rental costs - all that's available from Amedeo and on the public data from various listed SPVs they used to finance some A380s for EK.

EK do of course have pretty much the latest and most fuel efficient planes in their fleet with very low per-mile operating costs compared to other planes, but I still consider spending 150k-250k USD on fuel per sector expensive in absolute terms, especially when we do rough calculations of plausible revenue from pax showing thin margins! :)

But you seem not to realise that EK does NOT fly US-India.

They fly US-DXB, and India-DXB. This allows them to carry the low-fare India-US passengers (I expect that US-India passengers pay substantially more). And it also allows the same planes carrying these low-yielding passengers on various US-DXB routes, and on DXB-India routes, to carry other passengers on other itineraries, which are not low-yielding and which pay substantially more. And EK can also offer its US passengers a range of other destinations throughout Africa, the Middle East, and Asia that the US carriers can't. Similarly, EK can also offer its Indian passengers a range of other destinations throughout Europe, the Middle East, and Africa that the US carriers can't.

You still have a completely US-centric view of everything; and you seem to fail to grasp the concept of a hub, and how many airlines/airports thrive on connecting passengers. Your example of the US carrier having to operate US-India is a poor analogy to Emirates, who route everyone - not just the US-originating or India-originating passengers - through their megahub, where they can make connections to their other destinations. US-DXB and India-DXB are just two spokes. The US-DXB-India market may be low yield, and numerous, but unlike the case with the US carriers, EK has far more capability to carry other passengers on the same planes.

How many direct US-India services are there, anyway? I can only find UA's services from EWR to DEL and BOM. I know that Delta's New York to Mumbai service stops in Amsterdam.

If you have to stop somewhere, why not choose the Middle East? Passengers who are swayed by price certainly don't care where their stopover is [unless there are restrictive transit/visa issues]. I can think of very few people who would have some problem or issue with connecting in the "Middle East".

Indeed - I think any private individual or group of individuals who want to start an airline are a brave bunch! But it's not impossible to be a sustainable business, as long as you aren't expecting stellar returns! CX, U2, FR, QF (to a certain extent!), AK, SQ have good profitability track records.

Although it doesn't change the substance of your point at all - a few of us on this thread checked fares out and actually India-US via DXB is about the same price or cheaper than O&D in DXB. However, US-India via DXB is still sustainably profitable on the lower fares even with the additional costs of the extra sector, given a range of scenarios of yields and loads which match public fares on offer.

O&D in DXB is pretty much the EK equivalent of BA milking fat profits out of TATL as the cherry on the cake / justify having a lower profit shorthaul network.

EK's hub is DXB which is in the UAE. A tiny county on the other side of the planet from the US and A, the land of the free and the great. What makes you think that EK's hub and operations are dedicated to the US and that their revenue only comes from wealthy Texans wanting to fly non stop to DXB?

If the hub was say, IAH, or PHX. Then your suspicion may have some grounds. But it's not. And the whole US market is only a drop in EK's books. They fly to more than 130 OTHER destinations if you didn't know.

When some of us use the word 'world', our lexicon isn't the 'world series' or 'world champions' as you might think. We really mean the world of which the US (including HI and AK) only makes up 4 percent of its population. EK is bang in the middle of the Middle East, and no, that's not Illinois, Indiana, Kentucky, Michigan or Ohio. At 7 hour flight radius from DXB EK have access to almost two thirds of the world's population (4.6 billion?). To these folks EK is an excellent if not THE best option to go to the other side of the world and visit a nation less than 1/10th their size in population, known as the USA.

But hey don't let your convictions about our cheer leading stop you from believing whatever pleases you.

In a couple of months it'll be a year since I set foot on EK. I don't have tattoos of EK logo, nor do I miss their hand lotion.

I meant that I assume a passenger originating in the US and wishing to fly to India probably pays far more than a passenger originating in India and wishing to fly to the US.

At least in discount economy :D

Not that US-India is far more expensive than US-DXB.

(If I want to fly to AUH/DOH/DXB, it's generally cheaper to fly with the 2 ME3 airlines that are NOT based at the location that is your destination! They all charge a premium for their direct flights. For my next trip to AUH, I almost booked QR, but in the end redeemed miles on AB instead).

Doing some quick searches, it looks like in Y it's pretty much equal - c. 950 USD in either direction (leading us to suspect that is more priced at fundamental costs for the sector), but when you go to premium classes, you start to see where EK is adjusting pricing to local markets: 2.4k-4k India-USA in J, but USA-India is 4.5k-11k, and for F: 8.4k India-USA but 20k-23k USA-India!

The OP believes that you need high yielding premium pax to make a profit - are there any people on this board who have paid those kind of prices ex-USA for India? And who can tell us how full their flights were? :D

Even though, we did some calculations that show filling up a cabin with mostly lower price India-USA premium pax still generates enough revenue for profit (with or without cargo).