Because people keep feeding him probably

I think that quite likely is their strategy: make as much noise as possible, talk up the "unfairness" at every opportunity (and there is no "fairness" in aviation; so let's not even start on that one); whip the public up into a frenzy (which doesn't appear to be working); and build so much momentum with their campaign of noise that the government feels compelled to act.

Why let facts get in the way of a good propagandising expedition? Their documents don't appear to back up their claims in any way; but they seem to think that releasing hundreds and thousands of pages, which they reckon no-one will look at in any detail, and which they seem to wish to give the appearance of having had to search and dig hard and deep to find, in and of itself lends credence to their claims.

:rolleyes:

Far from being the "Emirates apologists" that we have been accused of several times in the past few months, the FT community is one that won't let the wool be pulled over our eyes. The more evidence the "Fair Skies" side offers up, the clearer it is whose minds are made up and whose eyes are blind to the "evidence".

The books are available; and your Fair Skies buddies have now uncovered the 1996 and 1997 accounts.

You have the last two decade's worth of figures to look at - don't you think you should? It's been 5 months since you initially made your sensationalist allegation, and you haven't bothered to look at the figures at any time in the intervening period?

Or are you just one of these "Wall Street types" you mentioned above?

Like I pointed out earlier somebody within Dubai always paid for the invoices so far...so up until now the debtors for the A380, handling charges, lounge fees always received money, however often not from EK, but from some more subtle sources, sources, which (surprisingly...) are not audited by the local division of a Big4 auditing firm run by the nephew of somebody close to the ruler of the sheikdom/aviation authority/airport/airline etc.

Looks like they are following a certain pattern, one we know from Enron, Worldcom or Parmalat.... :rolleyes:

Bolding in the statement by iahphx is mine.

We discussed this fact already months ago resulting in a new conclusion by myself back then:

Apparently, EK made it without further subsidies other than the original $10 million.

Additionally, they also managed to create provisions or had cash in the amount of close to $3 billion available during a time when their yearly turnover was only slightly higher...and the worldwide economy incl. aviation struggled 'mildly'

Reminds me of the good old days when the break even load factor of Emirates was always a bit lower than the real life loads. ;)

IIRC, they had break even load factors in the 50's about and very low 60's 5-10 years ago... :D

Again, apparently, they simply know how make with a half-empty plane, super low yields, but very expensive service and huge marketing costs.

They simply re-invented the wheel.

Anything to back this up?


Thought not...

According to the report in 1997, which lists statistics from 1993-1997, the break-even factor was 66.9% in 1993 (actual breakeven considering the profit margin was 0.60%), with pax load factors rising to 71.1% in 1997, with net margins of 3.4%. In 1997, the fleet consisted of 10 A310-300 (of which 2 leased), 6 A300-600R (1 leased), 3 777-200A (1 leased). Additionally, the company had bank borrowings secured on the aircraft (presumably for financing them), with coupons of 5.75%-6.88% (in 1996 they were 6%-9.25%).

Now we also know at this time, 1996-1997, there would be no real reason to present fraudulent accounts, seeing as these accounts were for the eyes of the owner only - unless either management were skimming cash out of the business (another serious charge), or they had a long term plan for massive fraud to all of their external commercial relationships - either banks, or in the future, after the EU opened up, to regulators...

This hardly seems that plausible, especially with no evidence.

So yes, apparently EK did indeed "made it" in 1993-1997 without any further required cash injections to keep it afloat, if their own accounts are to be believed (I appreciate you do not trust the veracity of these accounts, but absent any motives where you would falsify them at the time, then I think they can be seen to be accurate). No wheel re-invention required, just cargo revenue and low costs.

Regarding the fuel hedge - that is something where it would be interesting to know the exact settlement terms. I also find it hard believe that EK would have 3 billion USD sitting on the balance sheet in 2007-8 from retained profits, but I also think it is certainly possible for the fuel hedge margin calls not to be on the order of 3 billion USD, or required to be paid immediately - or indeed, for EK to find a buyer for the contracts on commercial terms. Some clarification from Morgan Stanley with EKs permission would go a long way to clear that up.

I am not sure where EK's expensive service comes into it - we have already shown that staff costs and their contribution to unit costs are lower than legacy averages, and you previously alleged in other posts that EK skimped on training or couldn't pay enough to get enough engineers. Perhaps you feel that the service provided is "cheap" - but that is a subjective measure of course and dependent on taste. Objectively I think we can say that the service provided is relatively inexpensive.

As regards to marketing - let's look at costs: it is alleged that EK paid 200 million USD - over 5 years, so 40 million USD for sponsorship rights to F1 a year, for example. http://www.bloomberg.com/news/articl...ship-agreement. EK currently has yearly revenues of 21.7 billion USD. 40 million USD on marketing is really quite a reasonable budget for global exposure. EK spent, in 2013-14, 1.475 billion USD on sales and marketing and a similar amount in 2012-13. Are you really alleging that they spent even more than this? It is still at around 6.9% of revenue, which when compared to other legacies such as IAG: 785 million EUR on 18,765 million EUR revenue (4.2%) and LH: 1088m EUR on 30,028m EUR (3.6%), QF: 636m AUD on 15,352m AUD revenue (4.1%), CX on 4,891m HKD on 100,484m HKD (4.9%) is in line and explainable - they have a higher sales and marketing spend precisely as you say, they sponsor headline events to try and drive revenue. It seems to work. The idea that marketing is not accounted for in the EK results does not seem to be borne out by comparisons with other airlines with their own results. As expected, expenses as a proportion of revenue are markedly higher than others.

I think it is less a case of re-inventing the wheel, but discovering an entirely new method of transport. The wheel still exists of course but now it has to compete with things like maglev.

As an aside, I was just in the Concourse B-C underpass which still has the display by BP, who helpfully said that each long haul flight uplifts 110-210k liters of fuel. Thus we can get an idea of how full the tanks are - but of course we know they are limited by physical capacity (323,546l) http://en.wikipedia.org/wiki/Airbus_A380 so I suspect on the DXB-IAH/LAX flights they fill it to around 300k as the max range is 9755mi, and those routes are around 8100mi.

I think you forgot to cite your source once again.

That's an editorial written by the newspaper. Obviously, the US3 thought their opinion was important enough to warrant a visit to their editorial board. Obviously, Chicago is an important town. It's also the headquarters of Boeing, and the President's hometown.

Well, this is why the Emirates story is interesting in a way the Etihad and Qatar stories aren't. Thanks to the US3 report, everyone knows what's going on at Etihad and Qatar. The USA and other nations just have to decide what, if anything, they want to do about it.

The Emirates situation is way more elaborate. For the reasons I've stated from the beginning, their "story" just doesn't add up when you compare it to the behavior of every other airline in the world. You don't go from nothing to number one in a decade -- especially when you're based in a remote (yes, the UAE is remote) part of the world, and two nearby airlines suddenly start having the same "success" copying your business model. It's like if UA started flying 200 more widebodies from EWR and DL thought that was such a great idea that they bought 100 to fly from JFK and AA built a new airport and added 75 widebodies. Oh, and you then shrunk the NYC population to a couple million. You also offered low fares and champagne and caviar.

And then nobody anywhere else in the world did the same.

If you don't want to believe this is fishy, you don't have to. But FD1971 is laying out a much more plausible scenario than the idea that Emirates management has mind-bogglingly fantastic business acumen that defies all of the history of worldwide commercial aviation.

The same sources as always, leading academics, well paid consultants to the industry as well as people working in the industry mixed with official documents from EK, i.e. your bible aka EK Annual Reports. I recommend taking a closer look at the years 5-10 years ago.;)

You can insist all you want the UAE is remote, but it isn't. Fiji is remote. Now would EK be able to compete in the way it does if there were a ton of quality airlines serving in their area such as exists in the U.S. and Western Europe - perhaps not. But that's not what they do. They often provide the only quality airline service to many places (although TK, QR and Etihad are giving them a run for their money. It is not so much that the UAE is remot but that it brings places together that are airline remote (as opposed to physically remote.

But that is just the problem. You and FD1971 keep laying out scenarios rather than presenting facts. You keep talking about all of the history of worldwide commercial aviation. Frankly, the history isn't all that old and new business models have been trotted out a number of times during that history which everyone said wouldn't be successful, but they were. I'm ready to listen to your arguments but enough with the stories and histrionic language already. SHOW ME THE NUMBERS.

Gääääähnnnn.

IIRC, the US3 just published a fairly comprehensive report....

About two weeks ago I asked the Friends of the Arabian Fairytale to name a single expert supporting this Grimm-like story, but so far not even the Weather Channel could help out.

Eventually, they will find an expert, one who works for the Sci-Fi Channel.:p

And Fiction is the key word here.....

A comparison with the US market will never be accurate, because the US carriers do not have the sort of growth in market size that EK has. A 100,000 people enter the middle class each day in India, where EK has a large brand following. Africa and the Middle East are growing too, and Dubai itself is getting larger every day.

Btw, here's an interview with Emirates CEO Tim Clark yesterday: http://atwonline.com/interviews-vide...dent-tim-clark

Link, please. Also a report from someone other than those whose sole objective is to squelch competition would be better. Surely, there must be some independent expert who has opined on this.

Approximately 2 billion people - just under a third of the world's population - live within 4 hours flight time of Dubai. If that's your definition of a remote location, then for clarity could you give us your definition of somewhere that isn't remote?