View Poll Results: Is Emirates A Financial Scam?
Yes
27
15.52%
No
106
60.92%
Dont care
35
20.11%
Undecided
6
3.45%
Voters: 174. You may not vote on this poll
Is Emirates a financial scam?
Nov 14, 2014, 4:16 am
#106
Join Date: Jun 2012
Location: 30,000ft
Programs: EK, BA, EY, SQ, IHG, HH, SPG
Posts: 670
Is Emirates a financial scam?
ICD which owns Emirates extracts a dividend from EK which services debts at the ICD level. It would be completely counter intuitive for them to extract dividends from one hand and then pay subsidies with the other. In any case lending banks would not stand for that. Proper airline analysts have done reports on an as if a listed entity basis with substantial access to financial reports, both EK and ICD publish audited data, and those analysts have not found any evidence of subsidies. Besides it does not suit Dubai's model to have loss making entities.
Nov 14, 2014, 6:06 am
#107
Ambassador: Emirates Airlines
Join Date: Sep 2004
Location: Manchester, UK
Posts: 18,618
Whatever those subsidies may be, I think any rational observer would say that the Chinese airlines are way more cautious in their int'l route development than the Middle Eastern airlines. And the trade/ethnic travel demand for US/China travel is a magnitude several times greater than US/Middle East travel.
Nov 14, 2014, 10:06 am
#108
Join Date: Nov 2013
Posts: 5,454
One of EKs main leasing partners, Doric, now Amedeo has "solved" that problem by making it somebody else's problem: injecting some small amount of equity into an investment trust (and applying suitable leverage) - listed on the LSE if anyone is interested in indirectly owning a piece of a few A380s leased to EK...!
Nov 14, 2014, 10:14 am
#109
Join Date: Nov 2013
Posts: 5,454
Also, I don't think EK fly A380s "willy-nilly" to the USA: all their Americas routes are launched with other planes (777-200LR/300ER etc.) before later on a decision is made to up gauge to A380/expand frequency because of the demand.
Nov 14, 2014, 4:03 pm
#110
Join Date: May 2012
Location: NY
Programs: AA Plat Pro, KrisFlyer Elite Gold
Posts: 578
Sorry, I don't think you elaborated on that point completely. You missed the fact that all of the US legacies have gone through Chapter 11 bankruptcy in the last 12 years, which have allowed them to write-off debts, and come back with favourable debt and creditor terms. The fact that the airlines had to file Chapter 11 demonstrates how poorly run the carriers were, and could still be. I seem to recall the fact that before the AAR group's bankruptcy, American was paying millions in leases on aircraft that were parked in the desert - that hardly seems like a sound business decision.
Nov 15, 2014, 1:10 am
#111
FlyerTalk Evangelist
Join Date: Jan 2005
Location: VCE
Posts: 14,165
Of course one could argue the assistance provided to Airbus and Boeing are a form of indirect airline subsidy- heading down that road though is a long and mind breaking path.
Nov 15, 2014, 5:59 pm
#112
FlyerTalk Evangelist
Original Poster
Join Date: Mar 2000
Posts: 17,425
Anyone who has spent an few hours reading how the ME airlines operate can easily see what makes the big difference, a substantially lower cost base than all those EU and even US airlines. And most of those A380's (and 777's) are leased on fairly favorable terms making the operations costs of having a modern fleet very good as well. Combined with low personnel costs and hubs that are fairly cheap to operate out of and that are not burdened with a lot of regulations (e.g. allowing night flights) and almost anybody can see that they have a lot of things going for them compared to most other airlines.
I know you Emirates loyalists don't "get it," and that's fine, but you should understand that the economics that these Middle Eastern airlines operate under are so much different than what exists anywhere else in the world that it "reeks" of fishiness. Which is why the USA airline CEOs say what they say. They know the math doesn't work.
Nov 15, 2014, 6:10 pm
#113
Join Date: Sep 2014
Posts: 37
Your employees could work for free and you could still lose plenty of money flying A380s between Dubai and Texas. I'm sure all the US airlines would lose buckets of money provide such service even with free labor. Everyone has to pay for fuel and aircraft expense, and (unless those are subsidized) they pay the same. Saving a few bucks on labor would make a difference on your P&L, but certainly could never allow you to do something that no other airline in the world could do (aka, make money operating premium ultra long haul service on enormous planes and then rely on connecting traffic).
I know you Emirates loyalists don't "get it," and that's fine, but you should understand that the economics that these Middle Eastern airlines operate under are so much different than what exists anywhere else in the world that it "reeks" of fishiness. Which is why the USA airline CEOs say what they say. They know the math doesn't work.
I know you Emirates loyalists don't "get it," and that's fine, but you should understand that the economics that these Middle Eastern airlines operate under are so much different than what exists anywhere else in the world that it "reeks" of fishiness. Which is why the USA airline CEOs say what they say. They know the math doesn't work.
Nov 15, 2014, 6:36 pm
#114
Moderator, Hilton Honors
Join Date: Nov 2003
Location: on a short leash
Programs: some
Posts: 71,422
Your employees could work for free and you could still lose plenty of money flying A380s between Dubai and Texas. I'm sure all the US airlines would lose buckets of money provide such service even with free labor. Everyone has to pay for fuel and aircraft expense, and (unless those are subsidized) they pay the same. Saving a few bucks on labor would make a difference on your P&L, but certainly could never allow you to do something that no other airline in the world could do (aka, make money operating premium ultra long haul service on enormous planes and then rely on connecting traffic).
I know you Emirates loyalists don't "get it," and that's fine, but you should understand that the economics that these Middle Eastern airlines operate under are so much different than what exists anywhere else in the world that it "reeks" of fishiness. Which is why the USA airline CEOs say what they say. They know the math doesn't work.
I know you Emirates loyalists don't "get it," and that's fine, but you should understand that the economics that these Middle Eastern airlines operate under are so much different than what exists anywhere else in the world that it "reeks" of fishiness. Which is why the USA airline CEOs say what they say. They know the math doesn't work.
Nov 15, 2014, 10:42 pm
#115
A FlyerTalk Posting Legend
Join Date: Dec 2000
Location: Shanghai
Posts: 42,047
Your employees could work for free and you could still lose plenty of money flying A380s between Dubai and Texas. I'm sure all the US airlines would lose buckets of money provide such service even with free labor. Everyone has to pay for fuel and aircraft expense, and (unless those are subsidized) they pay the same. Saving a few bucks on labor would make a difference on your P&L, but certainly could never allow you to do something that no other airline in the world could do (aka, make money operating premium ultra long haul service on enormous planes and then rely on connecting traffic).
I know you Emirates loyalists don't "get it," and that's fine, but you should understand that the economics that these Middle Eastern airlines operate under are so much different than what exists anywhere else in the world that it "reeks" of fishiness. Which is why the USA airline CEOs say what they say. They know the math doesn't work.
I know you Emirates loyalists don't "get it," and that's fine, but you should understand that the economics that these Middle Eastern airlines operate under are so much different than what exists anywhere else in the world that it "reeks" of fishiness. Which is why the USA airline CEOs say what they say. They know the math doesn't work.
I stumbled upon this thread by accident because I was contemplating flying EK on an upcoming trip. Because you are the OP (who I like as a person), I've tried my best to hold myself back from dissecting and refuting your case... but, it is honestly REALLY bad across the board. And, the fact that you have accused others of not "getting it" while refusing to respond to their specific points in an intelligent manner only makes you look sillier.
1) EK is not a point-to-point airline (everyone here admits this)
2) US airlines are partially point-to-point airlines, to the extent that they milk hub-x traffic for all that they can and that there home market is vast
3) AA, DL, and UA are the recipients of HUGE subsidies (i.e. you owe a great deal of gratitude to us taxpayers for your handsome ROI... my dad is in the same boat, but I let him revel in his "genius") AND protection from competition in the intra-US market (note: there is no intra-UAE market for EK to fall back on)
4) In the event EK is being propped up by "subsidies", you should be cheering because you, as a passenger, benefit from their benevolence
5) BUT, you haven't demonstrated a single iota of proof to support this "subsidy" claim
6) I put the "Chinese carriers are more rational" argument back in your court... no response yet
7) You present yourself as someone with exceptional acumen with respect to this industry, but you haven't produced any hard data in support of your claims
8) In light of the absence of substance, your words come across as emotional drivel... which, is why some folks here are throwing out "troll" card
In closing, if you want people to take you seriously, I suggest that you attempt to address some of these points (e.g. the ones that give you ACTUAL NUMBERS to work with) head on, rather than continue to spout things like "it's not possible".
All that having been said, you deserve credit for facilitating an interesting conversation here.
Last edited by moondog; Nov 15, 2014 at 10:54 pm
Nov 15, 2014, 10:43 pm
#116
FlyerTalk Evangelist
Original Poster
Join Date: Mar 2000
Posts: 17,425
Um, this is the airline business. There is a whole history of insanely dumb egotistical business decisions. Many of these have been made by airlines owned by their governments.
All I know is that if a USA airline decided to fly an A380 from Texas to the Middle East, the top management of that airline wouldn't last a month. The board of directors, shareholders and (maybe) the employee groups would riot. That is because words could not begin to describe the financial foolishness of such a decision.
All I know is that if a USA airline decided to fly an A380 from Texas to the Middle East, the top management of that airline wouldn't last a month. The board of directors, shareholders and (maybe) the employee groups would riot. That is because words could not begin to describe the financial foolishness of such a decision.
Nov 15, 2014, 11:07 pm
#117
Join Date: Nov 2000
Posts: 1,941
iahphx:
I stumbled upon this thread by accident because I was contemplating flying EK on an upcoming trip. Because you are the OP (who I like as a person), I've tried my best to hold myself back from dissecting and refuting your case... but, it is honestly REALLY bad across the board. And, the fact that you have accused others of not "getting it" while refusing to respond to their specific points in an intelligent manner only makes you look sillier.
1) EK is not a point-to-point airline (everyone here admits this)
2) US airlines are partially point-to-point airlines, to the extent that they milk hub-x traffic for all that they can and that there home market is vast
3) AA, DL, and UA are the recipients of HUGE subsidies (i.e. you owe a great deal of gratitude to us taxpayers for your handsome ROI... my dad is in the same boat, but I let him revel in his "genius") AND protection from competition in the intra-US market (note: there is no intra-UAE market for EK to fall back on)
4) In the event EK is being propped up by "subsidies", you should be cheering because you, as a passenger, benefit from their benevolence
5) BUT, you haven't demonstrated a single iota of proof to support this "subsidy" claim
6) I put the "Chinese carriers are more rational" argument back in your court... no response yet
7) You present yourself as someone with exceptional acumen with respect to this industry, but you haven't produced any hard data in support of your claims
8) In light of the absence of substance, your words come across as emotional drivel... which, is why some folks here are throwing out "troll" card
In closing, if you want people to take you seriously, I suggest that you attempt to address some of these points (e.g. the ones that give you ACTUAL NUMBERS to work with) head on, rather than continue to spout things like "it's not possible".
All that having been said, you deserve credit for facilitating an interesting conversation here.
I stumbled upon this thread by accident because I was contemplating flying EK on an upcoming trip. Because you are the OP (who I like as a person), I've tried my best to hold myself back from dissecting and refuting your case... but, it is honestly REALLY bad across the board. And, the fact that you have accused others of not "getting it" while refusing to respond to their specific points in an intelligent manner only makes you look sillier.
1) EK is not a point-to-point airline (everyone here admits this)
2) US airlines are partially point-to-point airlines, to the extent that they milk hub-x traffic for all that they can and that there home market is vast
3) AA, DL, and UA are the recipients of HUGE subsidies (i.e. you owe a great deal of gratitude to us taxpayers for your handsome ROI... my dad is in the same boat, but I let him revel in his "genius") AND protection from competition in the intra-US market (note: there is no intra-UAE market for EK to fall back on)
4) In the event EK is being propped up by "subsidies", you should be cheering because you, as a passenger, benefit from their benevolence
5) BUT, you haven't demonstrated a single iota of proof to support this "subsidy" claim
6) I put the "Chinese carriers are more rational" argument back in your court... no response yet
7) You present yourself as someone with exceptional acumen with respect to this industry, but you haven't produced any hard data in support of your claims
8) In light of the absence of substance, your words come across as emotional drivel... which, is why some folks here are throwing out "troll" card
In closing, if you want people to take you seriously, I suggest that you attempt to address some of these points (e.g. the ones that give you ACTUAL NUMBERS to work with) head on, rather than continue to spout things like "it's not possible".
All that having been said, you deserve credit for facilitating an interesting conversation here.
Beyond that, it is just better business economics from higher loads, larger planes, reasonably low staff cost (but not really that low), etc.
The case for EY and QR is different and tells us nothing about EK.
Nov 15, 2014, 11:16 pm
#118
A FlyerTalk Posting Legend
Join Date: Dec 2000
Location: Shanghai
Posts: 42,047
Um, this is the airline business. There is a whole history of insanely dumb egotistical business decisions. Many of these have been made by airlines owned by their governments.
All I know is that if a USA airline decided to fly an A380 from Texas to the Middle East, the top management of that airline wouldn't last a month. The board of directors, shareholders and (maybe) the employee groups would riot. That is because words could not begin to describe the financial foolishness of such a decision.
All I know is that if a USA airline decided to fly an A380 from Texas to the Middle East, the top management of that airline wouldn't last a month. The board of directors, shareholders and (maybe) the employee groups would riot. That is because words could not begin to describe the financial foolishness of such a decision.
Nov 15, 2014, 11:26 pm
#119
Join Date: Jan 2012
Location: Durban, South Africa | LHR
Programs: Emirates Skywards Gold | South African Airways Voyager Gold
Posts: 863
I agree that this would be a really dumb idea for USA airlines, but we are not talking about USA airlines here; EK is an airline that uses DXB as a HUB. As other have pointed out, they typically use 777s first and later upgauge to 380s only after the 777s prove their worth.
Nov 16, 2014, 1:45 am
#120
Join Date: Jul 2010
Location: Between AMS and BRU
Posts: 8,852
That's a sure sign of intelligence... labeling people who don't agree with you.
Instead of simply increasing your post count here, you might start reading what people are saying or do something which for you is probably unheard of, do some research yourself. There is more than one way to make money, and there is also more than one way to run an airline... it might even be required to do things a bit differently when you're based in the ME vs in the US.
But if you don't get it because you cannot understand things that are outside of your small little world that's not so bad. But stop showing that ignorance in every post you make here. Why even start a thread if you're not interested in learning from the answers but are simply looking to confirm your own narrow minded beliefs?
Instead of simply increasing your post count here, you might start reading what people are saying or do something which for you is probably unheard of, do some research yourself. There is more than one way to make money, and there is also more than one way to run an airline... it might even be required to do things a bit differently when you're based in the ME vs in the US.
But if you don't get it because you cannot understand things that are outside of your small little world that's not so bad. But stop showing that ignorance in every post you make here. Why even start a thread if you're not interested in learning from the answers but are simply looking to confirm your own narrow minded beliefs?