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Originally Posted by Xlr
(Post 24522378)
I'm pretty sure the main reason he's here is to meet with State, Commerce, and Transport deparrment officials, which he did Monday (but he didn't comment on those meetings beyond them being "very constructive").
Was this the CNBC video? http://video.cnbc.com/gallery/?video=3000362460 What really caught my attention was how the interview focused on Etihad, and Qatar getting state help instead. |
As many of us predicted, we saw EK implicitly distancing itelf from EY and QR today.
It's hard to see how urgent this movement really is. Everyone in Congress is against unfair subsidies, but the number of them who want immediate drastic action is unclear. As of now, it's less clear what the administration is doing. EK took a "let's slow down here" approach with their media strategy, let's see if it succeeds. At this point, no one really knows what their response would look like. If they drip-feed the media with specific rebuttals until they publish their entire response, this thread will remain a lively place :D |
Originally Posted by Xlr
(Post 24522733)
Everyone in Congress is against unfair subsidies, but the number of them who want immediate drastic action is unclear. As of now, it's less clear what the administration is doing.
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The folks at the US3 seem to have worked out this movement in terms of cost and effectiveness. An integral component of any movement is getting the public's support, without it there will be little they can do, even with lobby money (isn't that a subsidy by the way :D). At this stage and apart from the racist folk on this thread, I can't see public's support gaining momentum because the issue is distant and when the people think about it for a moment they'll realise it's NOT to their own benefit. The US3 are making sure to include the magic word they all hate, unions' support, in every media statement I came across. I'm unsure what sort of compromises were made between management and the unions to get them onboard, but I got a feeling they'll back flip on them once this is over. These are outdated manoeuvres.
US-based EK creditors, suppliers and partners are sure as hell working behind the curtain to ensure that the movement goes no where. |
Allegations in US Carriers’ white paper Sir Tim said: “The US carriers took 2 years, and goodness knows how much shareholder money, to assemble their campaign and a stack of allegations which included wrong assumptions and leaps of logic. We have reviewed their white paper and can debunk all claims that Emirates received subsidies. It will take time to assemble our own point-by-point rebuttal supported with financially and legally verified documents, which we are doing. However, we can tackle the main accusations against Emirates today.” Allegation: Emirates benefited from $2.7b in subsidies from the government’s assumption of fuel hedging losses, and the government also provided Emirates $1.6b in letters of credit: -Emirates’ response: That is untrue. All cash losses incurred by Emirates as a result of its fuel trades in place in 2008/09 were settled in full from the airline’s own cash reserves and not paid for by the government of Dubai. The letters of credit mentioned in the white paper were in fact provided by Emirates to our owners, ICD, in support of the fuel trades novated, not the other way round. Allegation: Emirates benefited from $2.3b in subsidized airport infrastructure since 2004, which is a “major competitive advantage”: -Emirates’ response: Infrastructure investment is long term in its nature. The Government of Dubai has made these investments, like other progressive emerging market economies (e.g China, Singapore) with long term benefits in mind. Comparably lower airport charges or charge exemptions for transfer passengers are neither a subsidy nor discriminatory as all airlines who use the infrastructure at Dubai International (DXB) benefit. -Emirates pays the full published rates at DXB, which are highly competitive, commercially based, and in fact higher than a number of other comparable major airports such as Kuala Lumpur (KUL). Allegation: Gulf carriers take passengers and revenues from US carriers, and force US carriers to reduce, terminate or forego services on international routes. -Emirates’ response: Despite what some carriers may think, air passengers are not proprietary to airlines. What Emirates is doing is competing in the marketplace - we don’t “take” or “steal” customers. We offer a great product at a competitive price, which appeals to the consumers who choose to fly with us. The three US carriers’ obsession with market share makes all the more apparent what they are really after: not competition, not open markets or Open Skies, but outright government directed market allocation. -Considering there is hardly any overlap between Emirates’ route network and that of Delta, American or United, this campaign by the US carriers is really about them protecting the revenue they earn from their JV partners. But why should the US government defend the interests of the European JV partners of these 3 US carriers? For that matter, what is the US national interest in forcing passengers to inconveniently connect in Frankfurt, Paris, Amsterdam or London – while depriving them the right to choose more efficient routing with a higher level of service? |
Originally Posted by eternaltransit
(Post 24522538)
If not, then they need to show that the rest of their network can be profitable enough and lobby Washington that the losses are not politically unpalatable in an election year.
The only way this could be answered is if EK divulge sensitive commercial information - perhaps this is an extremely cunning way for global airlines (that is, airlines who are at direct risk from EK entering their markets such as in Europe), using the US3 as their alliance spearhead partners, to get the ME3 to publish detailed operating costs and revenue data...! If that's the case I disagree. EK do not need to show detailed information to anyone. If they did that would be setting a precedent in the business world. Who is in Washington any way? and what jurisdiction do they have over non-US entities? |
The letters of credit mentioned in the white paper were in fact provided by Emirates to our owners, ICD, in support of the fuel trades novated, not the other way round. If this is true, then this is entering eat-your-words territory for the US3, Compass Lexecon, and whoever else was involved. I say 'if this is true' because I have not studied accounting, and do not know the convention for positive/negative (in parentheses) numbers in financial reports. Edit: I spoke with a friend who is a CPA, and according to the document, Emirates provided this letter of credit to ICD. This does not explain the reason for the novation in the first place, however. Waiting on their in-depth response for that and other allegations, including the price at which they purchase their jet fuel from ENOC. Edit: Somewhat unsurprisingly, the tweets from @OpenFairSkies have stopped. Let's wait for the media coverage tomororow. |
I've been reading this thread from the beginning without commenting, but really :rolleyes:
Originally Posted by iahphx
(Post 24521799)
Yup, I'll now be expecting all the bad-mannered Emirates apologists here to come forward and defend Tim Clark for stonewalling.
Several posters have presented detailed factual analyses backed up with impeccable references, while you continue to simply make unsubstantiated claims of "wacky", "silly", "impossible", "bizarre" business models. Several of them have acknowledged that EY and QR - note, not the subject of this thread - may well be subsidized by their gov'ts, while you keep implying that EK - on its own - received more than $40 billion. Calling your opponents "bad-mannered" says much more about you than it does about them.
Originally Posted by iahphx
(Post 24521799)
Yeah, sure. Folks, if the allegations are "bogus," it's easy to produce evidence. Like if the Dubai gov't didn't actually pick up that $2 billion in hedging loss, show us. Why he would come to DC to explain himself and then explain nothing is truly bizarre.
Originally Posted by CaptainEKAirbus
(Post 24523084)
All cash losses incurred by Emirates as a result of its fuel trades in place in 2008/09 were settled in full from the airline’s own cash reserves and not paid for by the government of Dubai. The letters of credit mentioned in the white paper were in fact provided by Emirates to our owners, ICD, in support of the fuel trades novated, not the other way round.
Originally Posted by Xlr
(Post 24524104)
If this is true, then this is entering eat-your-words territory for the US3, Compass Lexecon, and whoever else was involved. I say 'if this is true' because I have not studied accounting, and do not know the convention for positive/negative (in parentheses) numbers in financial reports. Edit: I spoke with a friend who is a CPA, and according to the document, Emirates provided this letter of credit to ICD.
This does not explain the reason for the novation in the first place, however. Waiting on their in-depth response for that and other allegations, including the price at which they purchase their jet fuel from ENOC.
Originally Posted by Xlr
(Post 24524104)
Edit: Somewhat unsurprisingly, the tweets from @OpenFairSkies have stopped. Let's wait for the media coverage tomororow.
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Originally Posted by Xlr
(Post 24524104)
Edit: Somewhat unsurprisingly, the tweets from @OpenFairSkies have stopped. Let's wait for the media coverage tomororow.
Also interesting is that further down that page you'll find Gérard Araud, the French ambassador to the US as a follower. Hmm. |
Originally Posted by iahphx
(Post 24522456)
They were smart to use AA's CEO Doug Parker as their spokesman. Those who don't know about Doug Parker will quickly learn his genius. Note the following passage from the Financial Times today:
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Originally Posted by edy4eva
(Post 24523110)
Are you saying that a non-US entity need to open their books to someone in Washington to get the heat off their backs?!
If that's the case I disagree. EK do not need to show detailed information to anyone. If they did that would be setting a precedent in the business world. Who is in Washington any way? and what jurisdiction do they have over non-US entities? What I meant was that the US3 seem to have spun themselves - perhaps not consciously, but it would be devious if it was deliberate - into a "he said, she said" situation - allege whatever you want, and then demand commercially sensitive information in order to satisfy them, whilst trying to appeal to the court of public opinion and failing that, legislators. I don't think EK are going to indulge that game, not just for their own dignity, but also the precedent, as you say, would be unacceptable for the US to continue to be a conducive business environment for foreign companies. |
Originally Posted by iahphx
(Post 24521799)
As best I can tell from the media reports (I haven't had a chance to listen to the actual "press conference," but I did just see him stonewall on CNBC), Clark will provide all his evidence "later."
Butwhen they do it - that's good. Right? |
Originally Posted by iahphx
(Post 24521838)
And the more money-losing service they offer to the USA, the counting is going to go faster. No unsubsidized airlines could sustain itself with those losses.
If you won't engage with the numbers, and point out whatever glaring inaccuracies they must contain (given that you know better, and can see that the numbers are wrong) then at least stop calling them money-losing services. |
Who knew that AA so badly wanted to start flights to India?
If the outcome is that EK's access to the US market is restricted/rolled back (and that outcome sounds, frankly, laughable!) then it should be made contingent on one of the US3 (and it sounds like AA is the one straining at the leash, here) starting a brand new service to India. If and when any of these new Indian frequencies is rolled back, then EK is allowed to increase its frequency to the US again. |
It's looking more and more lika an open shut case for Emirates.
Some more key points were said by Sir Tim Clark, -we are about to release mid year financial statements, "profits" are high -are vision for US expansion still stands at twenty cities -thinking about taking the US3 to court for false accusations/waiting for an apology in the future -it was the Italians who requested EK do the Milan-JFK flight because it was underserved -no plans at the moment to add additional TransAtlantic flghts -I am here representing Emirates only, I have nothing to say regarding Qatar, and Etihad |
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