GUWonder

A ban on labor unions is calculated as a government subsidy/state aid according to this "report"? Is the geographic location also calculated as a government subsidy/state aid according to this "report"?

Is DL saying he meant to link people from the Arabian peninsula with the 9/11 terrorists? As I said elsewhere on FT, Anderson has been a fan of "guilt by association" even when the "guilty by association" are innocent. Really, DL needs to stop digging itself into a deeper ditch with these kind of nasty insinuations and pseudo-apologies.

CaptainEKAirbus

I'm actually interested to see where the claimed '$5 billion in subsidies' comes from. Even the Emirates financial accounts outline the fact that Emirates has paid the Dubai government millions.

http://www.thestreet.com/story/13051...subsidies.html

Enzokk

First off there seems to be a lot of figures floating around. Is it $5B or $6B that EK received? Was the fuel hedging a write off of $2.4B or $4B? Seems as no-one can get the figures straight.

Secondly, for me it seems clear that the US3 are concerned about fifth freedom flights from the ME3 that will compete with their JV flights. They seem to have discovered gold with the Joint Ventures that have been given antitrust immunity and have not given any thought to actually competing on these routes with their partners. If EK, EY and QR were to suddenly enter the fray the airline would actually have to try and compete on product and price and I think this scares them into desperate measures (hence the above accusations to limit fifth freedom flying).

eternaltransit

Completely agree with you - I mean, look at the massive controversy (on the US side) over the Norwegian Air Shuttle TATL service that still doesn't have approval!

I mean, clearly Norwegian should be banned from flying to the US as it's got to be subsidised by all that oil there, how else could they be flying these obviously below cost flights to the US!!
http://www.usatoday.com/story/travel...foxx/14810499/
http://aviationweek.com/commercial-a...c-debate-heats

Oh wait, the argument in the NAI case is that they have moved to that bastion of state aid, Ireland and are therefore trying to "skirt labor and safety laws". There you have it, Aer Lingus need to be banned from TATL travel!

Xlr

I'm reasonably sure they had annual reports from the '90s on their old website. In fact, if you go on archive.org, you can see that their website had links to Annual Report 1999 and such. The reports themselves weren't stored by the archive, so I can't read them. (It says "click on the cover page to view the report", but the target at that location wasn't archived by archive.org)

Why would they remove it when they changed their website? Perhaps a format issue?

eternaltransit

I think they also fail to mention that EK has been going for around 30 odd years, instead of 16-20 years like QR and EY

I think it is a case of glass houses and stone throwing if legacy carriers want to bring up historical corporate affairs in the case of EK - what matters is whether current/recent historical operations (let's go back say, 15 years as to when US carriers got a fresh start), are consistently money losing and require constant injections of cash to not go under.

Xlr

Fair enough. I was only wondering why - considering that old versions of the EK website did have links to the older reports - the new versions don't have those links as well.

One of the dropdown menus here has a link to their 1999 annual report. The link, unfortunately, wasn't captured by archive.org. Still, considering that it was once public, I'm very curious as to why it now isn't.

Here's a rather interesting (but unrelated) historical page: http://web.archive.org/web/200001190.../y2k/y2kp2.htm

eternaltransit

Indeed - it would be interesting to have those clearly once published reports for inspection, as it would show (depending on the contents of course!) that EK has at least been trying to be transparent for a long time!

However, having 15 years of reports on one's website is I think more than many, many other public corporations, who only have 3-4 years at most.

Considering EKs IT department, they probably stored the report electronically on the same web server they then threw out in 2000

NOIR

I think the core of this issue is how the US airlines perceive subsidies? What's even more important is how will the US government perceive subsidies?

Few questions, if the owner, or owners of the airlines flip they're own bills/payments with out external help then how is that a subsidy?

If the owner, or owners of the airlines invest into they're equity how is that also a subsidy?

So they find some loop holes in financing that are legal, and offered to them by the exporting nations government, how is that a subsidy? I would actually call this a selling point on Boeing's behalf to help increase sales.

eternaltransit

The US3 and their JV partners in Europe I think are lucky so far that that PR debate has not shifted to the TATL Antitrust immunity debate in the public consciousness. Consumers might do well to raise the issue of: why can they fly 6000 miles to Asia non-stop (e.g. Europe-Singapore) for the same price as Europe- east coast US non-stop (on carriers such as SQ/CX or LX/LH) which is only a half to 2/3 the distance (3500-4500 miles!)

Xlr

So the "failure to release financial statements" is technically yet another false claim because they were in fact released.


Edit: If Delta uses what's currently on the website as a measure of whether financial statements were ever released, that's somewhat ironic since Delta themselves only provide results going back to 2009 on their website. United? 2007. American Airlines however does provide reports (for AMR) going back to 1997.

Xlr

Tim Clark has spoken about not hedging (post-2008 crisis) before, for example here.


Quote from the article:
“You think you’re going to win, but in the long term you always lose,” Clark said yesterday at the Gulf carrier’s head office near Dubai International Airport. “When we enter into derivatives, betting whatever it may be with counterparties who actually control the price of fuel in the first place, you have to ask yourself, ‘Is that smart?’”

ccyao

The US government should just do an Open Skies with all airlines and see who is the last man standing.

eternaltransit

Pretty much Rod Eddington, BA CEO 2000-2005 said about fuel hedging:
"a lot is said about hedging strategy, most of it is well wide of the mark. I don‘t think any sensible airline believes that by hedging it saves on its fuel bills. You just flatten out the bumps and remove the spikes. [..] When you hedge all you do is bet against the experts of the oil market and pay the middle man, so you can‘t save yourself any money long term. You can run from high fuel prices briefly through hedging but you can‘t run for very long".

I tend to agree with him - if an airline could successfully and profitably hedge fuel prices in the long run, then they should give up the airline business and become oil traders...!

eternaltransit

I think there is a little misunderstanding about what Open Skies actually is - "Open Skies" is really a economic and political policy concept that applies the ideas of free trade to air travel, which historically had a lot of protectionism and trade barriers in place. The real gritty details of how that policy gets implemented is in the form of bilateral (or multilateral in the case of the EU-US) Air transport agreements/treaties specifying the conditions of air travel between states.

It's not something that a state agrees with an airline - it generally applies to all airlines based in contracting states.

In practice, most states - especially the United States - still place major restrictions on air transport, either through reserved powers, or restrictions on ownership and discretionary approval of services.

If what you mean is, the US government should remove all barriers to air transport competition in its market, then that is a different matter