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Originally Posted by iahphx
(Post 24571631)
Lots of facts today in NYC at the Wings Club. Bob Crandall let loose with a withering attack on the "business strategy" of the ME3. I know many of the people here don't understand the absurdity of what's going on, but I can assure you that the US aviation community -- and gov't leaders -- certainly do. The game is about up. |
Originally Posted by Dieuwer
(Post 24572893)
A simple advanced search in the Emirates Forum using "iahphx" as username and "Find Threads Started by User" will show you that THIS is the ONLY thread the OP started in this forum.
In short, the OP comes to the Emirated Forum for the sole purpose of starting an accusatory thread. So yes, we first need to know the agenda of the OP before continuing. However, if the OP's agenda is actually in support of the US3, the OP's arguments have proven incredibly ineffective. By putting forward arguments which seem to be based in emotion rather than logic and failing to respond to the counter-arguments presented, I am quickly becoming convinced that the US3's arguments are without merit. Now, it is possible that this is the OP's real agenda - to build support for the ME3 by failing to provide adequate counter-arguments. If that is the case, the OP is succeeding admirably. |
Originally Posted by iahphx
(Post 24573201)
How do you intend to make money flying from Dubai to Orlando daily? Where do you intend to find, daily, 50 premium class passengers? Does it not trouble you that this is a leisure route. How many daily Dubai to Orlando passengers are there currently? How many India to Orlando pax? Also hows does BA find 80 daily premium class passengers to fly to MCO from LGW? How does TAM find 60 daily premium class passengers to fly to MCO from GRU?\ Oh and lastly, you make a lot of money out of charging for all of the excess baggage your passengers take back home from their US visit. :-) I jest, but I am sure this does earn some cash on the routes to India, as anyone whose ever visited an International arrivals hall in India could attest to. |
Originally Posted by lokijuh
(Post 24574357)
You don't make money initially. I think you'd struggle to find anyone on here that would suggest otherwise. However, like any business you invest, you build the brand, you build market presence. You incorporate MCO into people's itineraries to the JFK, IAD or other destinations, fly into one out of the other. You appeal to the wealthy Indians and Arabs in the region, alongside the middle classes. You tap into the VFR market (into MCO and out of the city closest to where everyone's relatives are found or vice versa). If you're not getting close to making money after the timeframe you initially determine, then you look at alternatives, including axing the route altogether.
Also hows does BA find 80 daily premium class passengers to fly to MCO from LGW? How does TAM find 60 daily premium class passengers to fly to MCO from GRU?\ Oh and lastly, you make a lot of money out of charging for all of the excess baggage your passengers take back home from their US visit. :-) I jest, but I am sure this does earn some cash on the routes to India, as anyone whose ever visited an International arrivals hall in India could attest to. Emirates is partnered up with JetBlue, too, so some of the traffic that comes in from Dubai can then transit to other destinations via MCO. |
Originally Posted by irishguy28
(Post 24573256)
Can you please link to this statistic?
Thanks. |
Originally Posted by iahphx
(Post 24573201)
OK, if you want to provide facts, let's get right to them.
How do you intend to make money flying from Dubai to Orlando daily? Where do you intend to find, daily, 50 premium class passengers? Does it not trouble you that this is a leisure route. How many daily Dubai to Orlando passengers are there currently? How many India to Orlando pax? What about two flights a day from Seattle to Dubai? Again, how many daily Seattle-Dubai passengers are there? How many Seattle-India? Are you not concerned that yields on your USA routes are the worst performing in North America? We know from the DOT they have had the highest declines of any US flights. Does that not impact your expansion plans? Everywhere else in the world, when yields sharply decline, service is curtailed, and expansion is certainly halted. Yet you accelerate expansion despite declining yields. Why? Doesn't it bother you that there are 2 other airlines in your neck of the woods doing the same ultra long haul expansion to the USA? Wouldn't that be part of the reason for the freefall in yields? Wouldn't that suggest that there are already "too many" flights from the ME3 to the USA? Let us go straight down to it: - EK intends to make money flying to Orlando by filling up its planes with reasonable fares, and with net margins in the 3%-5% range as acceptable. A rough cost analysis based on fuel costs for a 777-200LR on DXB-MCO (7724m - 2/3 of its range at max payload), means approximately 75% fuel load, or 36,000 US gals. With a fuel cost of 2 USD, that's 72,000 USD for fuel, and 162,000 USD of fixed costs allocated to the sector: 234,000 USD. EK will be happy with 250kUSD revenue. With a 8-42-216 configuration, and promotional fares targeted at 5000/3000/1000 USD round-trip, that's promotional revenue of 191,000 USD. A bit shy of the 250k target, but as you know, not all of the seats will be sold at that those prices. At 85% loads, there's a revenue floor of 162.5k - enough to be subsidised by profits on rest of operations whilst a market is being developed. - Leisure routes do not automatically imply low-yield economy passengers. As noted above, ULH trips by the presumed source markets are the preserve of the locally wealthy, and their attitude is, if we are going to go such a long distance anyway, we are going to go in premium classes. There would be serious loss of face if it were to get out that you had taken your kids for a trip to Disneyland in economy! I, however, do not expect you, OP, to understand the cultural nuance of "face" judging by your cultural background, but do be assured it is a serious, serious motivating factor in purchasing decisions. Irrational, maybe, to Western eyes, but present nonetheless. As to whether you can find enough passengers - I did mention that only 0.30% of households in the source regions with the wealth to afford premium ULH have to travel yearly to sustain a 80% yield premium cabin on the route via DXB. - Seattle-Dubai is a much more known quantity. I have taken the following statistic from the DoT data, which has the 6 months to June 2014. http://www.dot.gov/policy/aviation-p...tistics-report What it shows it that there were a total of 100,433 passengers, on 117,764 seats. Load factor is 85.3% on average, and ranges from 79.9% in March - when EK increased capacity on the route from 777-200LR to 777-300ER up to 93.6% in June. EK are betting year-on-year passenger number growth mirrors the rest of their experience in the US market, which is at least 10%, and it shows that additional capacity is stimulating extra demand. This bolsters Emirates' case that they are especially applying to their MXP-JFK route that their presence in a particular market increasing competition actually increases the overall market size. This makes additional deployment a good bet - not a sure bet, of course, but it certainly has a plausible business case going for it. - The DoT does not publish yield data for individual airlines. If you do have verified yield data, please feel free to link us here. Without that information, we can only work on public fare data, approximation of costs and verified load data - which seems to work out for many months of the year. - Commercially, if I was Emirates, I would be concerned (but not overly so) that my two closest competitors are receiving direct cash injections to support them during expansion. However, I would invest in my product and selling point - network connectivity and a globally competitive product - rather than futilely lobbying my government to try and restrict those carriers from competing, because my owners seem to be happy with my performance, both by returning dividends to them and supporting their aims to bring more people to Dubai. I would say that I am providing a commercially sustainable product that has a better value proposition for literally billions of people than travel providers whose shareholders benefit from protected margins to the exclusion of their customers, who hold to antiquated notions of consumer travel demands and outright arrogance in having a proprietary attitude to market ownership - the idea that a business has a right to certain customers: that is the idea that will not fly, especially in the United States, if it wants to call itself a believer in liberal economics and capitalism. - |
OP - I nearly forgot to mention: you wanted some hard data on some ULH routes to the US (from the same link as above).
For LAX-DXB, which added daily A380 service in Jan 2014 we have load factors of: Jan - 89.8% Feb - 78.2% Mar - 84.8% Apr - 85.4% May - 92.6% Jun - 88.2% So, all the questions about where pax are coming from, or where they are going to aside, it's clear that EK are not having trouble filling these planes. Perhaps it may be wise, in light of independent, verified data, to modify your assumption that no one is flying to or through DXB throughout the year on A380s from the USA? Tim Clark, far from blustering, seems to be stating a simple observation he has seen in the course of his business. Clark, the Emirates president, said of the A380 “It’s a very big cash generator for us. I just open the doors and the people come.” http://www.bloomberg.com/news/articl...fade-conundrum Incidentally, the numbers are similar across other gateways - even IAH and DFW, at 81.9% and 89.8% respectively, and also carriers (for instance, EK and UA ex-IAD have 77.9% loads, DL ex-ATL has 88.9%). |
Originally Posted by iahphx
(Post 24563547)
IThe 2x SEA flights are similarly astonishing. It would be hard to imagine 2 city pairs with worse geography. A Dubai connection makes no sense for 99.9% of the int'l air travelers from SEA. If you're headed to India -- which is where Emirates says most of their SEA passengers originate -- you have to massively overfly India and head back.
http://www.gcmap.com/mapui?P=SEA-DXB...EL,SEA-FRA-DEL |
Originally Posted by Kiwi Flyer
(Post 24575780)
Incorrect. Flying between SEA and India is slightly shorter going via DXB than going via Asia or Europe; and of course EK serves more places in India with more flights than other airlines.
http://www.gcmap.com/mapui?P=SEA-DXB...EL,SEA-FRA-DEL |
Originally Posted by cestmoi123
(Post 24575839)
Well, sure, if we lived on a spherical planet, you'd be right. :)
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Originally Posted by You want to go where?
(Post 24574343)
I understand your feelings on this, but frankly, I don't need to know the agenda of the OP. I have found the discussion quite interesting, regardless of the agenda of the OP.
However, if the OP's agenda is actually in support of the US3, the OP's arguments have proven incredibly ineffective. By putting forward arguments which seem to be based in emotion rather than logic and failing to respond to the counter-arguments presented, I am quickly becoming convinced that the US3's arguments are without merit. Now, it is possible that this is the OP's real agenda - to build support for the ME3 by failing to provide adequate counter-arguments. If that is the case, the OP is succeeding admirably. |
Originally Posted by irishguy28
(Post 24573465)
Frankly, no.
The OP opened up this thread with a post packed with inaccuracies and allegations. If we all said to the OP: yeah, you're spot on. We've all thinking the same. My gut feeling is that we would have had this very thread mentioned in every news report. |
I hope this thread continues...
I am EK FF ( just silver) but like the product overall. Why? Because they provide daily service to DXB and then on to many places. If I fly on BA, AF etc I may wait days for first flight... My gf is CC on ME metal and confirms subsidies exist. But when pinning her down, she offers little argument and nothing that could assist those attacking EK (sorry IAHPHX))! EK gets some assistance (whether that be high level influence, the best slots etc) but I am sure does not get billions of dollars to quash willy nilly! |
Originally Posted by irishguy28
(Post 24575917)
Well, our sphere isn't misshapen to the extent that SEA-DXB would involve "massively overflying" India, as the OP claimed above!!!
I did run the flight miles from SEA to Dubai and it's longer than the flight miles to Delhi. And then you have to fly back to Delhi. Not usually how ultra long haul works. |
Originally Posted by Dieuwer
(Post 24575950)
Well, you are still arguing with him. So, perhaps this is really more like Fillybustering? Talk as much and as long as you can about a nonsubject until your opponent drops dead.
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