I can accept that, but was just restricting my observations to the flights I've done myself which were - for the most part - full.

I've written elsewhere in this forum about being threatened with IDB in GVA because the flight was overbooked, and last year I flew out of MEL because I couldn't get a flight out of SYD within a three day period. So the whole "flying half full planes" doesn't ring true with my experience.

So, if I may summarise the last several month's debate, here are the conclusions of this thread.

The US3 for too long sat back and underestimated the threat of competition that they now see hurtling over the horizon. They sat back and chortled at the reports of it happening in other aviation markets, but they didn't care. Their turf was sacred, and consolidating further with every passing year. The US market was sewn-up!

In a cynical attempt to try and get the public on-side (and how many of the US travelling public actually like the US3?) and to try to put pressure on politicians to renege on agreements that were already concluded some time ago, they now accuse others of doing what they've been doing ever since they were each founded.

This is no financial scam. It's simply about protectionism.

Also it seems all the US services seem to be lumped together under the ultra long haul label, therefore all subsidised/unprofitable But 1/3 of their destinations (not sure what proportion of their flights/seats) from DXB-USA are what are just typical long haul flights (DXB-JFK/BOS/IAD), similar distance as routes like SIN-LHR, HKG-YVR, NRT-JFK. DXB-JFK is 6849 miles, NRT-JFK 6745 miles and SIN-LHR 6765 miles. Even DXB-ORD is about the same distance as HKG-LAX and some 550 miles shorter than HKG-ORD. EK connects ORD to India the same way CX does to China.

So if CX, SQ, BA and the various carrier flying between New York and Tokyo are making these length flights work, then why is it beyond the realm of possibility that EK could? Genuine question.

That leaves DFW, LAX, SFO, SEA and IAH as the questionable, operationally difficult ULHs.

But US airlines fly from those locations, too. And they only offer connections to a small number of places in the "known world*", and then mostly via partners - so they end up having to fly customers ALL THE WAY to Europe or somewhere just to offload them on some pesky, money-grabbing partner. (Oh, wait - they have immunised joint-ventures on all those routes. Sorry).

But still, this means fares are artificially high from the US. So Emirates can easily undercut fares on city-pairs that US carriers actually offer from these cities - and still make a profit!

The US carriers don't seem to want to deal with customers in the unknown world* - so let Emirates and their ilk have them. They must be filthy, unwashed beggars, no doubt!!!

*Known world/Unknown world: the OP seems to have the opinion that US citizens don't travel to these weirdly, wildly exotic global destinations. Even DUBAI seems a hopelessly remote, exotic, unappealing destination for an American - hell, even Europe is getting dodge for an American!!!

The people that actually reside in such places can't afford to travel anywhere, let alone to the US - right???

But not using the A380. Although they do have a few ULH's in the top 30 routes ... DL ATL-JNB, AA DFW-HKG, and like EK, UA appear 4 times with EWR-HKG/BOM, LAX-MEL & ORD-HKG.

As the usual suspects on this thread have reminded us, it's not about the loads, it's about the yields, and as we all know, EKs fares everywhere are dirt cheap and the planes only filled with low-yielding foreigners and backpackers :D

The A380 isn't this hugely expensive, black hole of money that everyone makes it out to be, but you have to fill the seats its got. Some calculations I made a while (a long...long... while) ago show that cover fuel and operating costs (which include cost of capital etc.) and eke out something like 2-3% net margins, you need to consistently hit 85%+ loads, including premium loads.

Calculations are back on pages 7-15 (http://www.flyertalk.com/forum/emira...al-scam-5.html)

DoT statistics show that they do that some months, but not all months, but there are more months where they do it than not. So I agree with you right now that they are probably on the whole, best case, breaking even or net margins of 1% on these unfamiliar routes, but given year-on-year growth trends in the US, that the additional capacity is not increasing at the same rate as passenger numbers.

But that doesn't matter! With many more planes to fill, it is even harder for the US carriers operating from these "difficult" markets!!!! They have thousands of seats to fill from those markets each day!!!!!

Emirates only needs a few hundred!!

I think that even those who consider themselves experts in the field would learn something from reading this article.

Now - who are the ones that you think are hiding something?

I'll post the conclusion, too - but there is plenty of more meat for you to enjoy on that page.

We have industry veterans (apparently) telling us what can't be done.

Their experiences/training come from an older, highly-regulated, and protectionist time.

I guess that the Gulf Airlines and their business models were never the subject of Aviation Management degrees in the last millennium. But that world is dead. And you need to keep up with the times. Who would submit to a doctor who had not practiced, or read up on new techniques, since 1995?

It's not so much a case of "it can't be done" - it's a case of "we must NOT allow this to be done".

Quite a few things to comment on in the past couple of pages, so I'll first add to some of the experiences a couple of posters alluded to before going on to address the various issues brought up - and in fact, try and untangle them into a more coherent theme as I think right now there are a few separate issues which are being woven into one story and I think that's a little unhelpful, especially as the discussion has by now encompassed so many things!
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RadioGirl's issue with booking EU-AU flights
RadioGirl gives us some anecdotal evidence in post 1244 that loads ex-EU and ex-AU are so full she has been denied boarding/unable to get flights, on a fairly regular basis. Before the credibility of an anecdote is challenged, let me simply point to post 1014 http://www.flyertalk.com/forum/emira...l#post24538197,
where I linked to independent data provided by the aviation statistics authorities of Australia, the UK, France and Spain showing healthy EK loads and so makes this experience more credible to generalise. As to fares associated with these loads - Expertflyer has a good database where one can browse the data and project yields as the loads increase. I don't think I need to go over again the fact that fares and loads aren't correlated in a linear fashion - as loads approach capacity, the fares increase in a more exponential fashion (take a look at J Flex Plus fares compared to F saver!).

Take the fare/load data and project onto operating costs for an A380 - and I would be interested to see some alternative calculations made as to the ones I made, as they have gone unchallenged for 5 months now and I am not an expert in this field (I would quite like someone more familiar with airline network operations and finance to point out errors/simplifications in the model) - and you can conclude that money can be made.
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Historical and current issues
Now we can move on to making the issues at hand a bit more clear. Firstly we need to separate out historical investments into establishing an aviation industry with current profit from operations discussions. That way we can avoid all of the cries of: "the US3 went into Chapter 11" and "KLM got loads of money from the Dutch government" and "but Dubai built a big airport" - what's done is done and there is no point talking about the past, where there is overwhelming evidence that to some degree or another governments globally have all invested in their aviation industries on a non-commercial (aka cash returns on capital) basis. Talking about whether it is "dirty" or "unfair" is simply a moral judgement on your opinion about state capitalism and state involvement in the economy.

What the subject of this thread is about is whether EK receives on-going cash injections similar to what QR and EY are alleged to have received and receive on an on-going basis.

So, that is why the repeated claim of: "Not really possible to start up an airline like Qatar, Etihad or Emirates with $10 million and an A310 and/or 727." by FD1971 is a red herring.

But in the interests of being thorough, let's examine this claim a little more closely - EK was founded in 1985 and has had 30 years to build up. Now, it might sound completely ridiculous to think that an airline can come from nothing and after only thirty years have global ambitions and 221 aircraft in the fleet. However, there is another airline that was founded in 1985: Ryanair. We know what an economic success that airline has been - although yes, it has a different business model, the core of their success was keeping costs low and having high utilisation, allowing it to undercut incumbents and still generate profits. And what profits they do generate! Margins in the high 10s and low 20s. Another airline, founded in 1993 - AirAsia. Nearly went bankrupt in 2001 and purchased by Tony Fernandes for 1 dollar and the assumption of 10 million USD in debt. Now the dominant regional LCC in SE Asia with similar margins.

Is it too far fetched to imagine that an airline whose profit requirements are only in the 2-6% range be able to sustain operations to scale up to a similar size (in terms of fleet at least) over 30 years?

I would argue neither of those two airlines were case studies in the 80s and 90s, but they definitely will be in the textbooks of the future.

But we digress. Let us discuss the points brought up by FD1971 (and then afterwards move on to the more unpalatable issue of the nature of his posts, which I feel at this point needs to be brought up).
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The issue at hand: profit from operations

No one can confirm or deny authoritatively either way, whether EK needs cash injected into the company to continue to be a going concern - and by extension that their published accounts are fraudulent - without access to actual internal EK numbers. That is why this thread and discussion exist. What people can do is bring point out evidence in support of both conclusions and evaluate which one seems more credible. People saying it is not a scam (defined as, ongoing, current cash injections), show that there are scenarios where it is possible for EK to make a profit from operations.

I’m afraid the evidence to support that it is a scam is rather unconvincing at this point, because the proponents of that argument on this board do not deign to give us any verifiable information or challenge the scenarios laid out specifically.

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In post 1230, FD1971 states that the OP's opinion is backed up by: Who are these industry experts, and why do they constitute the vast majority of industry experts?

Later on, in 1236, he equates these questions about who these experts are, with climate change deniers:Quite aside from the point that all the "pointless quips" are in fact coming from him, not the other posters, the scientific consensus around climate change is based on multiple pieces of research which are peer-reviewed and published in transparent, independent journals, where sources are cited, the methods described and other scientists are free to do the analysis themselves and publish rebuttals or supporting papers. This is the backbone of the current academic method. To extend that to this discussion means that one cannot just quote "the vast, vast majority of experts", one must say who these experts are, and how the claim of "vast majority" was derived. We are still waiting on this information.

As to the 70 page report - as anyone who has read the report can attest to, the vast majority of those subsidies were attributed to EY and QR. All the report says about EK is a historical fuel hedge novation to its owner ICD and unquantifiable allegations about preferential pricing at DXB. Now, in previous posts - and by EK in this press release: http://www.emirates.com/us/english/a...s-release.aspx, the claim about the novation was discussed - and the conclusion is without knowledge of the exact terms of the derivative, e.g. the strike price, unwinding terms, we cannot know for sure what the margin call was and how it was fulfilled.

That is EKs reply - and they seem to be adequate and plausible explanations, unless any further information about them comes to light, or is raised (hopefully in this thread!), then those issues have been fully addressed.

More generally - readers and posters should stop conflating EK with EY and QR as well, it is at best a misconception and at worst deliberately disingenuous and, I would add, considering the ample warning by many posters here about the dangers of that conflation, that further conflation of the three implies a subtext of ulterior motives rather than neutral discussion.

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In 1230, the poster challenges readers with some questions. The issue about burden of proof has been dealt with - it's not on the accused to refute allegations, clearly - so it is really about "why isn't anyone copying it?"

To that question I would reply:- the only countries in the area who want to invest in the public infrastructure are Bahrain, Qatar and the UAE - they are generally politically stable (apart from Bahrain at the moment)…who are…it seems…all copying EK. You can’t copy geography - which is one of the core competitive advantages that make the business model viable. As many posters have replied - EK is also copying previously tried and tested business models, such as those of KL and SQ and CX, but has the bonus of its geographic and demographic reach.

Why aren’t private parties copying it? Because of the barriers to entry in the aviation industry - who has the capital to make the initial investments? Why would you allocate your capital that way when there are easier returns to be made? Airlines are notoriously risky: you aren't going to find a bank on this planet which will lend to a nobody to start an airline without major collateral. It’s not as if one can simply buy a plane and start service on routes - it takes time and is capital intensive. EK has had a 30 year head start and has amortised the costs of various support systems like Training College and maintenance already.

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Now in post 1233, the poster states:Once again the poster is conflating EK with EY and QR. I think it would be helpful if we could get the accusations correct, even if there are different conclusions. I think we have already discussed the specific allegations against EK.

Later in that post, he asks As to the question about how anyone believes they can earn profits on ULH flights: it can be believed because of the load factor data, fares on the routes, Airbus manufacturer data and fuel cost data.

Where is the information that refutes all of this public data to show that that EK doesn’t get enough revenue from these flights? Even if these flights (ULH using A380 to the US) lose money, why can’t the rest of the operation generate enough profit to cover those losses whilst the routes are being developed.

EK doesn’t have super low RASM on other parts of the network, they are the 3rd largest cargo operator in the world (http://www.iata.org/publications/Pag...reight-km.aspx), second only to FedEx and UPS Airlines, marketing and communications costs are published in their accounts (although I appreciate you believe that EK’s reports and complete fabrications), and the point about connecting pax is irrelevant if you have already brought up the point of Revenue per seat mile - what matters, as you say, is the yield. It is not at all clear that connecting passengers have lower than cost revenue, especially when many routes in the EK network are the shortest possible (China-Africa for instance).
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A little digression
Before talking about the tone of the posts and the contributions to the discussion in the spirit of FT, for completeness' sake, I do want to talk about the issue in 1232.

I know this is a digression, but in the interests of pointing out why the tangent about Dubai’s financial woes in 2007-8 are irrelevant, we should state exactly what happened.

Dubai World was the entity that asked for debt restructuring, not the government of Dubai. EK is not owned by Dubai World, but by the Investment Corporation of Dubai (ICD). Dubai World’s main projects are DP World (of the ports controversy) and Nakheel, the real estate developer.

This was the main culprit as banks had lent money to Nakheel to build things like the Palm and the World - a massive land reclamation project (not “the tower” as FD1971 states obliquely, although we should assume he means the Burj Khalifa, which was actually constructed by Emaar, which didn’t need a bailout).

Now these banks lent money on the assumption (on their part) that Dubai World and Nakheel were quasi-sovereign and that the government would bail it out as needs be. What they didn’t bank on (hah!) was the fact that real-estate in Dubai was a bubble and crashed spectacularly - and that the only security the banks lent on was future project cash flows from completed residential developments on top of the new projects - not "Dubai running out of money". So that put the government, as 100% owner, in a difficult position. Decline to bail out the company and the resulting contagion might (would, no doubt, considering Dubai World had 3/4 of Dubai debt at that time, 59 billion USD out of a total of 80 billion USD) affect other parts of the economy or itself seek financing to inject equity into the company to satisfy the banks and loan covenants - after a debt moratorium was introduced in 2009, all Dubai government-related entities had massive ratings downgrades. We know what happened - Abu Dhabi and the UAE Central Bank rode to the rescue in 2010 and in return the UAE economy didn’t completely collapse and Sheikh Khalifa has a new tower named after him. Like the US/Canadian bailout of automakers, the concern wasn't for the company directly, but for all the jobs dependent on the supply chain in the economy - and Dubai World and Nakheel certainly were woven tightly into the economy of Dubai considering the construction boom at the time.

What this has to do with Emirates though, I am rather at a loss to explain - EK during this time could only produce little dividends, nowhere near enough to bail out its government, certainly not to the tune of 59 billion, or even the short term debts on the order of 4-5 billion USD which were due in December 2009 - see the Nakheel Sukuk 1 issue maturing 14th Dec 2009 -http://www.propertywire.com/news/mid...912143752.html. Perhaps FD1971 has brought this up to indicate that EK is also a recipient of government largesse - but in that case, why didn’t EK go belly-up during the crisis? Did the government infuse EK with cash at the expense of its lenders to Dubai World? Perhaps keeping the airline afloat was more of a priority than avoiding an effective sovereign default…

Or perhaps the simpler explanation is that EK was self-sufficient and had reserves to weather the storm…after all, its own lenders seemed to have more faith in EK than the rest of Dubai at the time, judging by the ratings and facilities offered to it then! (see their annual reports).

As to how this leads onto the next point...
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The tone of the discussion

I must apologise in advance to the moderators for the increasingly personal dimension to the posts but it seems to me that instead of being seen as someone who wants to contribute to the discussion and learn more as an interested, but ultimately non-expert party, I, along with other posters, are being implicated as some sort of EK defenders and treated with condescension - and I don't think this is really very helpful to the discussion or within the spirit of FT.

To wit: FD1971 has stated many times before and reiterates in 1233 that he wants to more education in the matters at hand, and states he "doesn't need convincing" (post 1197); he has stated:
However, it is clear he regards anyone who disagrees with him - or even asks questions as ignorant and uneducated and a target of derision:
and in 1197:
Of course, he is entitled to that opinion, but it is telling that he does nothing to try and remedy that by providing some more background to his information - as he has been challenged to do in many posts, e.g. 1234., even though he claims to want to bring more education to the thread, e.g. in post 463:

He repeatedly says we do not have to convince him - that is obvious! What we would like him to do is engage with the "non-experts" and have him point out the errors in our analysis with some reasoned, transparent thinking and cited sources, instead of using allusions to historical events that he knows not all of us will have knowledge on, bluster, and in the end, avoidant behaviour.

It would do much more to educate and inform the discussion, instead of endless sniping using smilies - by his own admission, more information would help us all along the way...but instead of putting his words into actions, he has been so far, been quite lacking in substance - that combined with the tone of his posts and dismissive attitudes to any criticism (which seems rather insecure), his credibility, which, I suspect the self-image of which is built on stating historical events to build up self-confidence and project an air of authority, in fact, on further examination tends to fall down. This is not good for the discussion or Flyertalk.

At least the OP is much more honest - he doesn't wrap his accusations and attacks with a thin veneer of "I'm only trying to educate you".

I could be rather mean-spirited and say that what counts for insight, knowledge and experience in the West clearly is no match for that exhibited in other parts of the world - at least in the aviation sector!!!

As an aside - I remember flying EWR-DXB on MH in 2003. They charged an arm and a leg for the route too.

Exactly. But dont underestimate the negative power of the "middle east' reference on the US public in this "debate". 99% of the US population/politicians cannot tell the UAE apart from 'the bad guys'.

Comments from Tim Clark today: http://skift.com/2015/04/10/emirates...and-malicious/

It's very Europe focused. But he had some interesting comments re labor, especially in light of the recent WSJ article about long work hours at EK for staff.

However, no word (in the article) about a response to the report except that it will be handled.

Regarding the long work hours for staff - cabin crew at least - I know for a fact that it is true that they are getting FG1 (F crew members) to work as GR2 (but paid as FG1 of course) in Y for some months as there are crew shortages.

As to how this reflects on the operational challenges of an airline trying to be profitable - surely a hallmark of subsidised, propped up, money-losing businesses, especially in the aviation industry, is of overstaffing and poor labour productivity and the costs associated with having too many staff being paid too much not doing enough.

That is clearly the exact opposite of what is going on with EK now - cabin crew and pilots complaining of increased workloads is symptomatic of not enough staff available to meet new demand. You may argue again that EK simply needs to do something with their new aircraft deliveries and that they fly their planes empty - but looking at the load factors from published aviation statistics authorities, we know that is not the case.

YMMV about how much sympathy you will feel about cabin crew workload of course, considering the benefits that are offered to those staff (tax free salary of 35kUSD, no living costs, global airline to use your ID90 tickets on) and the negatives of working in Dubai.

Pilot stress is a different matter of course - they are well remunerated at EK, but no one wants overworked pilots flying the planes. These are clearly issues for a separate thread though, not a discussion about operational profitability.

As to the constant stream of articles in the WSJ being published portraying EK in a negative light, I have to wonder if there is any hand-wringing in the editorial department: on the one hand, the WSJ is rather unsympathetic to labor issues and inefficient companies that can't compete, but on the other, they still seem to have loyalty to the US3 for a reason one can only think to be patriotic jingoism...or they have been captured by lobbying efforts :D