Even the US government has an official progam to SUBSIDIZE airlines to operate otherwise LOSS MAKING ROUTES. It's called the "Essential Air Service": http://en.wikipedia.org/wiki/Essential_Air_Service
Oh, the irony!

Digging around reveals even more subsidies: http://consumertraveler.com/today/af...for-taxpayers/

Indeed -- and that was my original motivation for starting this thread. The idea that you could profitably fly an A380 from Texas to a Middle East city of 2 million people is so far removed from anything that has ever occurred in commercial aviation that it MUST be subsidized. It would be no different than if an upscale restaurant opened in NYC serving $4.95 filet mignon. Something seemed shockingly wrong with that plan: it flies in the face of everything that profitable (and even unprofitable) airlines actually do.

I would also be very careful about paying too much attention to load factors. Scott Kirby at American always says he can fly as many seats as he wants between two destinations and fill them up. That's easy: all you need to do is adjust the price. The hard part is figuring out how many seats you should offer to make A PROFIT. The more seats you have, the harder it is to sell them for a profit; you have to discount. This explains the promotional behavior we're seeing from the ME3. And explains why no USA airline has bought the A380: it's too many seats to sell on most routes at most times.

Everyone in the industry knows ultra long haul is really, really tough to make money on. Look at the list of flights: all of them -- except the flights to the Middle East -- serve very specific needs. Many are polar: getting from the East Coast of the USA to China the faster way. These routes also benefit from connecting some of the leading business centers of the world. The other routes tend to be long ocean journeys where there are no logical cities to stop in: routes like USA to Australia or South Africa.

And then there are Middle East flights, that seem to only "work" on "Middle East economics."

http://www.thrillist.com/travel/nati...ked-by-mileage

I do appreciate FD1971's European perspective because my perspective is USA-based. While I'm a very frequent int'l flyer, I'm predominantly a US-based investor. I don't want to make this discussion about me, but my "iahphx" moniker originally comes from my investments in Gordon Bethune's Houston-based airline and Doug Parker's tiny, largely-forgotten Phoenix-based airline (that is now the largest airline in the world). So I've had some success over the years in picking and predicting successful airline business models.

I honestly don't know if you can make money flying A380s from the Middle East to Europe and Asia/Pacific. I doubt you can, for all of the reasons already stated in this thread. I'm particularly skeptical you can do it offering lots of premium connecting seats, and offering premium frills. Regardless, I'm 100% certain that 3 Middle Eastern airlines cannot simultaneously make money with this strategy: capacity is going to far outstrip demand.

That said, I can conceive of such service as an economic development tool. But where is starts getting bizarre is when you start flying these planes halfway around the world where there aren't any "natural markets" whatsoever. If anyone can truly make ultra-long haul flying profitable where the vast majority of your passengers connect, I think I'm going to have to become a communist. Because Karl Marx's economic theories are going to sound way more plausible than that business strategy to me.

No, it is not. And you clearly do not know your aviation history.

In the past such behaviour was far more pronounced. Passengers wishing to travel any appreciable distance had to "hopscotch" their way through any number of intermediate stops, some existing only to refuel the plane and never being a destination in their own right, others possibly being used as a "hub" where a different plane could be caught.

Places like St. John's, Honolulu and Anchorage performed such functions until relatively recently!

Places like Detroit, Houston, Atlanta, Philadelphia, Charlotte, Mineapolis, etc, perform the same basic task, right to this day. The only difference is - these hubs (attached to cities which are in no way responsible for the majority of traffic their airports handle) predominantly deal with domestic travellers. But then, none of these places are within 8 hours' flying time of 80% of the world's population. None of these airports offer direct connections to such a spread of global cities. And none of these cities market themselves as holiday destinations, even as stopover destinations for travellers.

Fine, then. Which neasures HAVE you been paying attention to, then? Other than your own unsupported convictions?

This may be an accepted truism in North American aviation, as no carrier based there appears to offer any ULH flights.

Others can, and do, operate these flights, though.

Perhaps North American logic holds true only in North America?


If you think the only international routes in demand are USA to Canada, USA to Mexico, and USA to Europe - then fine. There are no natural traffic flows between any other parts of the world, and trips that don't touch the US simply don't happen.

You STILL want to ignore the fact that people passing through Dubai can transfer to MORE CITIES in MORE COUNTRIES than is possible anywhere on the planet. Emirates' network is now so vast that they can offer HUNDREDS, if not thousands, of one-stop global itineraries that no-one else can match. You obviously missed my earlier posting of an article, from some years ago already, where the passengers on a randomly-chosen EK flight from Glasgow were connecting on to 39 other flights at Dubai, to a range of destinations from Africa, through Asia, the Indian Ocean, the Middle East, Southeast Asia, China, India, the Far East, and Oceania. You are completely closing your eyes to the ME3's ability to offer compelling connections from an increasing array of origins...and even if there is only 1 or 2 passengers wishing to travel from, say, Glasgow to Accra, or from Dallas to Dhaka - then Emirates is usually the quickest, cheapest, and easiest way to travel. Add in the thousands of other passengers originating at each city each day, wishing to travel to thousands of worldwide destinations - and, increasingly, Emirates (or one of the other one-stop Options offered by the other ME3 airlines) is the only show worth going to.


Emirates does not need to fill a plane, or several planes, each day with passengers wishing to travel from <insert random US city> to Dubai. They just need to fill the plane with passengers that are bound for the entire world. Even for a country whose citizens are renowned for not being well travelled, even EK cannot struggle with that job in the US.

I wouldn't say so, NA ULH examples are abundant and easily refute the OP claims about the viability of ULH routes:
AA: DFW-HKG, ORD-PEK
DL: ATL-JNB (world's second longest route) ATL-DXB, LAX-SYD,
UA: EWR-HKG, EWR-BOM, LAX-MEL, HKG-ORD, IAD-DXB, LAX-SYD, SFO-SYD, IAH-NRT
AC: SYD-YVR, YYZ-DXB, YYZ-DEL (both soon to start/resume)
AM: MEX-NRT

DL saying they're worried about EK's MXP-JFK would be equivalent to India's airlines complaining about DL AMS-BOM (which is going to chopped off soon). Oddly enough, here's Anderson's own testimony on the reason for cutting that route:
http://www.globalatlanta.com/article...es-ex-im-bank/

So when the war on Ex-Im bank went no where, they waged the war on the clients.

That reference to 1k jobs (which is a rather large figure) as a result of a single route is a sly way to bring up unemployment which to the polos appear to be a major election concern.

So you started a thread asking a question but in reality your mind was already made up and no matter what factors and facts or figures were shown to you, you weren't going to change your mind. You should rather have just stated in the title, Emirates is a financial scam, instead of asking if it is.


Better tell Boeing and Airbus that they should stop designing aircraft that can operate longer than 4000nm in distance as anything more than that is a loss maker. Or maybe the fact that they do offer such aircraft that fly further than that actually means that there is a business case? I mean it is not like they consult airlines on what features their new aircraft should have.:confused:

Well FD1971 was also trying to figure out which parts of EK's strategy can be implemented at EU airlines, but finding no redeemable strategy employed by EK. What we have is two posters who have made up their minds on what and how EK operates and nothing will persuade them otherwise.

It has been noted that trying to compare, as you and FD1971 has been trying to do, EK with any other airline will not work. You will always have factors that are crucial in one area of business, but that same factor will have no influence in another area. The US and EU have a multitude of destinations they can fly to within 2-4 hours of their hubs/countries. The ME3 has nothing of the sort so already you have a huge difference in the way the airline that operate in the different countries will be run. It doesn't even work to compare EK with EY and QR as they are 2 airlines still in their growing phase, trying to grow at record pace to catch up to EK.

But anytime you try to fit a square peg into a round hole you will find the conclusions that you have been wanting all along.;)

Interesting article about Emirates from Ted Reed this weekend. Reed seems more interested in the nitty gritty of this dispute than the USA's other prominent industry reporters. He suggests that someday there might be some JVs with the major US airlines.

http://www.forbes.com/sites/tedreed/...jfk-goes-away/

There is one big problem with this theory, though. JVs are structured to share profits. I'm not sure why any USA airline would be interested in sharing certain losses. There would have to be some major changes in the business models of the ME3.

Qantas seemed to be happy to do a JV with EK. But, it's circumstances are vastly different:
- SYD/MEL/PER/BNE/ADL-DXB are massive point to point markets (:rolleyes:)
- East coast Australia-Dubai is really short haul in comparison to the ultra long haul's that EK is doing out of the US (after all SYD-DXB is 560 miles shorter than DFW- DXB) (:rolleyes:)
- Australia-Europe (which is main source of traffic on JV) have much bigger populations at either end (30 million & 350 million) compared to the much smaller US-India/Pakistan/ME market (:rolleyes:)
- QF is massively subsidised by the Australian government, and received a lot of support from them when recently facing some profitability challenges/losses during 2011-14. (:rolleyes:)
- NOT!

Seriously though, isn't a big part of your argument that EK appear profitable because of subsidies it receives (directly or indirectly). Publicly however, EK have reports showing their profitability. So for all intensive purposes to an outsider these routes (US-India/PK/ME) may well be profitable (because of the alleged subsidies), so a JV would indeed be sharing in the profits from routes (ie. at the very least sharing in the subsidies). Might as well grab a slice of the pie (the pie of subsidies that is).

It seemed more like wishful thinking than a serious suggestion based on my (admittedly quick) read.

That forbes article says one thing over and over: Get rid of MXP-JFK.

There's nothing nitty gritty about it, a bucketful of allegations dressed in fact-costumes.

Anyone with primary school level education can easily tell. Oh wait.

Chinese tourists are not all low yielding-they often outspend tourists from other nations due to the fact that the visa process ensures that only higher quality tourists arrive (the PRC passport has very limited visa free access.)
Canadian tourism statistics from 2012-2nd highest in the report
(admittedly, this does not break out HK which is visa free, but I suspect that HK traffic is much more likely to be VFR traffic. In particular, I think personally that Canada is not competitive for shopping due to lack of GST refund facilities-but that's for another section.)
UK 3Q statistics 2014
Take a look at tables 15/16 and compare the numbers for 'Other China' (China excluding HK) to tourism spend. You can repeat this for other countries and compare their spending, which seems higher.

As the saying goes, "there is a Germany inside China".

The tourist and VFR flows that tie OECD countries with large LDCs is far more lucrative now than it was a decade or two ago. The Brazilian tourists to the US have been outspending the OECD European visitors to the US, on a per visitor basis, while in the US. As evidenced even in this thread, there are people who are still operating off old national prejudices and stereotypes about "non-European" passengers, and that is part of what feeds this disbelief about what kind of routes make sense or don't make sense.

Yes, the article does seem to want to protect the JFK-MXP flight. I don't know why though. I still want to know, maybe our friends here familiar with both the EU and US air travel can tell me, why is the JFK-MXP direct flight at least $400 cheaper than the JFK-Rome flights? Why can Aeroflot charge 700 euro less for a 1-stop flight and Aer Lingus charge 400 euro less than the direct flights from JFK to Rome?

Why is the JFK-MXP flights 500 euro less for the direct flights than the JFK-Rome? How can other airlines offer cheaper one stop flights against the direct flights if they aren't subsidized?

All airlines that can't offer non-stop service have to pitch their prices cheaper than the prices of the direct non-stop option. Otherwise, most people would just book the direct flight. If it's cheaper and quicker to go direct - why would you pay more to fly out of your way, and take longer to get where you want to go? Most airlines can't fill their planes with O&D traffic - every airline will need transferring traffic, too. And carrying more transfer traffic means that they can add frequencies, making their flights even more attractive. You can probably understand that Delta couldn't fill a plane every day to Milan with people who just want to fly between New York and Milan. Therefore, they would, maybe, have 3 or 4 flights a week which would be the frequency more appropriate for the level of demand between New York and Milan (the "natural traffic" that exists between these two cities - to paraphrase the OP who seems to refuse to understand that people ever fly on indirect, connecting itineraries). But not having a daily service makes that option less attractive - if you want to fly Friday but the flights are on Thursdays and Sundays, you'll go with someone else instead. So, Delta will offer tickets to passengers who don't start in New York or Milan only. These extra transfer tickets - sold at a lower price - are still useful to the airline, because it fills the plane further, and makes a greater frequency of service possible. This brings additional benefits - when there is at least one flight a day, then Delta can offer a more compelling offer to those passengers who must travel on a certain day.

EVERY airline in the world does this - selling indirect tickets for cheaper prices - and it is a basic aspect of airline pricing.

Fares are dynamic and the price differentials you have quoted are unlikely to be longlasting, durable differences in price. But you can probably understand why Aeroflot would have to come in much cheaper. You're going to be flying a couple of hours in the wrong direction, then making a transfer, and flying another couple of hours to just to get back within the same range of your ultimate destination as when you left 6 or 7 hours previously.

And the question as to why JFK-MXP is cheaper than JFK-Rome isn't comparing like with like. While there may be some people bound for Rome that may consider flying to Milan and transferring themselves by car/train/whatever, there really is no connection at all between the JFK-FCO and the JFK-MXP markets. Just because they're in the same country, or relatively close to each other, doesn't mean that the pricing on one in any way influences the pricing on the other [of course, if there is a systemic bias in prices to one market, the other market will eventually notice, and start flying to the other destination despite the inconvenience of having to transfer further, if the price should justify it]. Each route represents a distinct market, and the prices will fluctuate depending on supply and demand. In short, you may as well compare the price of JFK-FCO with that of JFK-HKG. Furthermore, Emirates doesn't even seem to offer a price on JFK-Rome (at least, I can't get their website to price one). Secondly, JFK-MXP is a different market to JFK-Rome.

Here's a quick look at the current prices for an Easter weekend trip from JFK to Italy:

http://i57.tinypic.com/15efvoz.jpg

As you can see, Delta will charge you almost $500 more to travel on the direct-nonstop flights to Rome than to Milan. Alitalia will charge you over $1000 more to fly to Milan than to Rome (and Alitalia will charge you 2.5 times what Delta wants for the exact same flights!).

In general, you will also see that Milan is a more competitively-priced market out of Kennedy than is Rome; at least based on this limited data set!!!

Therefore, we must conclude that subsidies are at play here, too, as the only explanation that accounts for the vast differences in prices?

You seem to be overlooking the obvious point... that EK's enormous capacity in the market keeps prices in check (I'm not sure this is true, by the way; it's just a case the other guys are trying to make). Low fares are obviously good for consumers, but not so good for airlines used to fat margins.

I thought that would be obvious!!

EK's economy cabin is currently sold out on Thursday April 2 on the route - meaning that their cheapest return fare for the dates above is $2952.50 with the outbound flight, of necessity, being in business.

I guess EK is doing OK on this route!!!