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I'm one of those who voted "undecided"
One thing that mystify me, is the fact that Dubai have no natural resources (aka - oil). In light of this, where does it get the money to subsidize EK? The ponzi scam suggested does not hold water, cause EK is dealing with international creditors for fuel, parts, planes, technical services, airport catering, etc. Unless all the creditors are also in on the scam, I just don't see the benefit. Maybe someone can throw light on this. |
Originally Posted by iahphx
(Post 24704650)
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 highlighted part of your comment can be said about AA and their 11bil windfall while claiming bankruptcy. |
Originally Posted by irishguy28
(Post 24675746)
International Consolidated Airlines Group has pulled its subsidiaries out of the Association of European Airlines (AEA) in protest at that association's protectionist viewpoint Regarding the ME3.
Ultimately, one has to blame the company model in the US and EU. If a large company AB makes a blunder and builds a plane no one wants, it is easier to sell to ME3 and drive the local airlines out of business than it is to admit fault and close the assembly lines and lay off workers. Ultimately US and EU will realize that like China, ME has a long range plan. Grow the business over decades of subsidy and then close the competition down. All alternatives are not pleasant. 1 Pay staff less (along lines of the ME3) and cut costs - risk labor strife and fight local hire laws 2 Pay staff more, keep overhead high and go out of business (repeatedly as in the US and just screw the owners - idiot investors who believe in the airlines) 3 Raise fares for everyone in EU and US and anger consumers, allow upstart airlines with new planes and younger labor to bypass and bankrupt the established companies (Ryan Air, Southwest - once upon a time, Spirit, Allegiant) 4 Start a protectionist platform - and try to limit entry of the ME3 (and risk your owner being angry w you like QR - so back track) 5 Any ideas left anyone? I do have one - Let me try out the showers and I will tell you if they are worth keeping the airline around. Keep tuned a month or two. |
Originally Posted by FD1971
(Post 24704943)
Gääääähnnnn.
IIRC, the US3 just published a fairy 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. But at least you agree that the US3 have written their own "fairy report"!!! |
Originally Posted by iahphx
(Post 23820910)
1
You obviously don't know much about airline economics. 2 There just aren't that many places in the world where there's strong demand to fly 600 people at the same time. You generally increase yield by offering the most convenient flight times for biz travelers. That's why, for example, AA flies a dozen times a day between LAX and JFK on relatively small aircraft. 3 That said, the USA airlines would certainly NOT be among the most profitable companies if they operated the way Emirates does. Indeed, I assume they'd lose billions. I do not think anyone on this board is that much of an expert 2 No one wants a dozen flights a day from Houston to Hyderabad They want 1 nice flight with good connections 1-2 a day at most 3 They already have 4 Lastly if you are using points, they want no major fees. AA wins here with BA YQ, but the rest are not far behind. |
Interesting comments from the USA CEOs in this Chicago Tribune story.
Doug Parker's are the most interesting because he's given everyone who's paid attention the past 14 years an extraordinary lesson on how to succeed in the airline industry (he started with nothing, tiny money-losing America West, and built it into the largest and most profitable airline in the world). Here's his take. Note that it sounds very much like what I've been saying here, because much of what I know about this business I learned from Parker and his team. Gulf airlines are using huge aircraft to fly money-losing routes, Doug Parker, CEO of American Airlines said Tuesday. "Those (routes), categorically, cannot be profitable no matter what your cost structure is," Parker said. "But they're still flying them because they don't care about being profitable -- because they don't need to because they're subsidized." Jeff Smisek was more glib, but also entirely accurate:"If our government was subsidizing United Airlines for $2 billion to $5 billion a year, then the front of United Airlines planes would have three-room suites with a butler and a shower and Dom Perignon and Iranian caviar," United Airlines CEO Jeff Smisek said. A lot of Flyertalkers might not like these guys because they're hard-nosed businessmen. They take away perks from over-entitled people like me (I'm a UA 1K who now sits in the back of the bus), but they know how to make money. They're not liars, and Doug Parker is as straight a shooter as they come. If he tells you these routes can't make money, it's simply true. http://www.aviationpros.com/news/119...gn-competition |
EK's operational structure is to only have 4 "banks" of arrivals, each of which is followed by a departure bank. (Someone analyzed this five years ago, at http://www.airliners.net/aviation-fo...d.main/4939112). Since most people are connecting, this suggests most destinations would have 5 flights a day or less.
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Originally Posted by iahphx
(Post 24705980)
. Here's his take. Note that it sounds very much like what I've been saying here, because much of what I know about this business I learned from Parker and his team.
Gulf airlines are using huge aircraft to fly money-losing routes, Doug Parker, CEO of American Airlines said Tuesday. "Those (routes), categorically, cannot be profitable no matter what your cost structure is," Parker said. "But they're still flying them because they don't care about being profitable -- because they don't need to because they're subsidized." ......They're not liars, and Doug Parker is as straight a shooter as they come. If he tells you these routes can't make money, it's simply true.I don't know if you know, or even care to know, but Emirates does actually have operations that cover other places in the world outside the US. Other airlines do seem to profitably operate A380's on routes of similar length to the US East Coast-DXB (including British Airways, Lufthansa, Singapore Airlines, Qantas, and Korean). So assuming that BA, LH, SQ, QF & KR are all legitimate, non-subsidised businesses that can make money on routes similar in length to JFK-DXB, then once again, we are talking about the EK A380 routes to LAX, SFO, DFW, IAH. Assuming they are making losses, then why is it so inconceivable these are subsidised by the flights to/from the other 136 destinations that EK has? Lastly, Qantas seems happy with performance on the longest commercial route in the world SYD-DFW is doing OK, and it's an A380 route as well. |
Originally Posted by iahphx
(Post 24705980)
They're not liars, and Doug Parker is as straight a shooter as they come. If he tells you these routes can't make money, it's simply true.
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Originally Posted by iahphx
(Post 24705980)
Note that it sounds very much like what I've been saying here, because much of what I know about this business I learned from Parker and his team.
Gulf airlines are using huge aircraft to fly money-losing routes, Doug Parker, CEO of American Airlines said Tuesday. "Those (routes), categorically, cannot be profitable no matter what your cost structure is," Parker said. "But they're still flying them because they don't care about being profitable -- because they don't need to because they're subsidized." Jeff Smisek was more glib, but also entirely accurate:"If our government was subsidizing United Airlines for $2 billion to $5 billion a year, then the front of United Airlines planes would have three-room suites with a butler and a shower and Dom Perignon and Iranian caviar," United Airlines CEO Jeff Smisek said. But once again, one of the US3 CEOs has to make a unconfirmed accusation about the ME3. It's ironic that Doug Parker would be making a statement such as, 'Those (routes), categorically, cannot be profitable no matter what your cost structure is', seeing as his entire Asia network is unprofitable. If we followed his same thought process that 'anything that doesn't make money must be subsidized', according to his own statement, AA's Asia route network must be subsidized too. |
Originally Posted by iahphx
(Post 24705980)
A lot of Flyertalkers might not like these guys because they're hard-nosed businessmen. They take away perks from over-entitled people like me (I'm a UA 1K who now sits in the back of the bus), but they know how to make money. They're not liars, and Doug Parker is as straight a shooter as they come. If he tells you these routes can't make money, it's simply true.
But if any of them truly believe that "these routes can't make money", then they are not as clever as you like to think they are. |
Originally Posted by You want to go where?
(Post 24705065)
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.
Secondly, as pointed out about 123 times already, this is really not a hot topic anymore, because the situation is about as obvious as a 'democratic election' in Bulgaria, Romania or the GDR prior to the fall of the iron curtain, however you will still find people who believe that the GDR was a clean-cut democracy and that Lance Armstrong had nothing in mind with Doping, despite all the evidence... Over the last months, I presented all kinds of evidence incl. detailed examples where and how the ME3 cheat, I quoted people who were there for years and returned after retiring, not to mention a massive report by the US3 aside from the fact that for some strange reasons no one of the 44 outlaws found anyone speaking in favour of the ME3, when it comes to their track record. Not even on the Weather or Disney Channel.... I also wonder why nobody copied the ME3 business model yet. I mean, com' on people are readily available in India or in China. Money is not an issue in India, China, Kuwait, in Saudi-Arabia, but for some strange reason they stay away from the A380, Ultra Long-haul flights and hubs that are insanely expensive to build. Why oh why remains the question. Maybe, just maybe, they paid some experts who looked into the matter only to conclude that the ME3 business model is fiction. :) |
Originally Posted by Xlr
(Post 24706129)
EK's operational structure is to only have 4 "banks" of arrivals, each of which is followed by a departure bank. (Someone analyzed this five years ago, at http://www.airliners.net/aviation-fo...d.main/4939112). Since most people are connecting, this suggests most destinations would have 5 flights a day or less.
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Originally Posted by irishguy28
(Post 24706977)
Your bromance for this triad is really rather cute!
But if any of them truly believe that "these routes can't make money", then they are not as clever as you like to think they are. On one hand, we have a few dozen experts in Aviation Management working for a leading airline with access to everything one can dream of, incl. hard data from a major CRS and historical performance data for any route you can think of. They argue it is impossible to make money on certain routes. On the other hand, we have a few members of FT, with no experience in Aviation Management, no degrees in (Aviation) Management, no access to a CRS let alone any other useful data... They argue it is certainly possible to make money on the same routes... Looks like it is time for another survey. @:-) My apologies in advance in case someone of the Magic 44 actually has a degree in Management or work(ed) for an airline. I did not intend to make fun of you, I just intended to point out the difference between the average EK fan in the stands or the lounge and real experts on the subject and their different conclusions.... ;););) |
Originally Posted by devilfist
(Post 24705220)
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?
Filling an aircraft should never be in assue. In case, you experience problems just offer a 2 for 1 Special ex DFW. Making money in the low cost industry usually requires a very very high utilisation of the aircraft, however EK seems to be different. According to their Annual Report 2010-2011, their BELF was very low for most of the last decade: For the FJ 2005/2006 just 59.9 % and for the rest of the decade just around 64%. |
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