Zol

Wow, I finally managed to catch up on all 285 posts and 19 pages....do continue

kEiThZ

EK will still be around. You'll still be a no-name "analyst". And the legacy carriers will be planning their next round of bankruptcies and mergers.

You offer plenty of evidence on why the US carriers are failing. If their management thinks anything like your "analysis", we know why they can't compete with the likes of EK.

The only point one can concede is that EY and QR are subsidized. And even there, it's not really bearable for their backers to keep it up for too long. EK on the other hand is brutally efficient. Just look at their aircraft utilization.

And while "analysts" like you can't conceive of the world beyond the USA or even the fact that some immigrant communities in the USA can be high-yielding (the Indian diaspora in the USA has a remarkably high average family income), there are plenty of other actually capable analysts who can see profit and opportunity where you don't.

Please let us know who you work for. We really should be warned about an employer that would hire such an ideologically stubborn "analyst" who is incapable of deciphering Emirates properly. I wouldn't want to trust my money to any investment broker who used such poor "analysis".

kEiThZ

I'm wondering if he's travelled outside his suburb. Does he know how many South Asians and Arabs there are in Houston? The VFR traffic alone would (and does) fill the Y cabin of the A380 daily.

Mariocph

+1

missingmanager

It is obviously not Air Canada who have recently launched a new service from Toronto to Dubai saying in a press release:

"The three-times-weekly Dubai service will be Air Canada's first non-stop flight to the UAE at a time when air travel between North America and the region is growing, including more international connecting traffic over our Toronto global hub," said Calin Rovinescu, President and Chief Executive Officer at Air Canada."

He may not be recognised as the best Airline Chief Executive in the world by the OP but this adds to the number of seats available from North America to the Middle East.

FLLDL

Understood. Just couldnt let the original statement go unchallenged given some of the silly claims the OP had posted in this thread.


Honestly I do think that EK does face some big potential headwinds in the future. A few simple examples:

Mounting competition from the other ME3 + TK who have essentially copied EK's business model and share EK's geographical advantages. Cannot be good for EK's margins to have these other three airlines all working against it in such close proximity. In addition these competitors may have a greater appetite for losses than EK.

Destinations - The low hanging fruit has already been picked. If we look at the global route map ten years ago it was easy to see where big future growth could come from for EK. Looking at it today and projecting towards 2024, this is much more difficult exercise. Many of the potential markets (China) seem unlikely to throw the doors open to EK and the others.

None of which makes EK a scam, but I do think a lot of the easy growth for EK has already occurred.

benzemalyonnais

Hmm well I initially thought the same as the OP after flying 5 JFK-MXP RTs that were 30% full in both J and Y.

And then I flew twice to India. 100% loads.

iahphx

It's the USA service that makes you wonder what's going on here. It's so completely irrational. Maybe they just don't understand. That seems incredible to me, as they're running a global airline, but who knows. There are plenty of other airlines that start flights in the USA that fail, so it's not like this is the first dumb business plan to come along.

I can see how they make money in India, but that seems somewhat ephemeral. Once an Indian airline gets its act together, I think Emirates business there declines. But I'll let the Indian airline experts debate that. It's the USA stuff that I know, and I know Emirates USA business strategy is ridiculous.

moondog

I don't think you can draw many conclusions about "USA service" based on the (perceived) performance of an isolated 5th freedom route.

Mrtrash757

Im probally in the minority with this but....

I see EK/Ethiad/Qatar lowest to Asia from here in Chicago (in the far future mind you) by 100 dollars compared to CX. not a big difference but the biggest thing that makes me want to fly on CX is connection time. All of the ME3 itineraries involve 32 hours each way, over night or a 8-10 hour connection, compared to CX's fare for 25-100 more, with a shorter connection time, I would choose them over the ME3 :/

So price is a bearing but not when you have insanely high connection times. my 2 cents, from this future economy flyer

iahphx

Honestly, I think that 5th freedom route would be WAY more successful than their Dubai flights. Many, many Americans travel to Europe, and vice-versa. Few Americans travel to the Middle East. Anyone have the numbers? Wild guess: I would think O/D USA-Europe is 25x O/D USA-Middle East -- and much greater if you exclude TLV.

Seriuously, the idea that there is a need for wide-spread USA-Dubai A380 flights is beyond bizarre. That's why I question how this airline could be truly profitable.

moondog

The network is an integral part of the network model and they don't have a hub in Milan!!!

eternaltransit

Hello again iahphx and thank you for continuing to liven up our corner of FT

EK send a lot of A380s because they have already tested demand with 777s and think they can make more money with extra seats.

Of course, you want numbers and I am happy to provide:
http://www.dot.gov/policy/aviation-policy
specifically
http://www.dot.gov/policy/aviation-p...tistics-report.

Taking the latest June 2014 quarterly report (http://www.dot.gov/sites/dot.gov/fil...une%202014.pdf), the US Department of Transport reports that DXB is the 17th busiest international passenger gateway to the USA with 2.3m pax year to June 2014, with a load factor of 84.5%. Of the pax, 86.2% arrived on foreign metal, which we can safely assume to be EKs. Perhaps that doesn't give us the most accurate measure of loads, as that will include DLs ATL-DXB flight.

So, let us take JFK-DXB which helpfully is in the top 50 US-International routes. There we see in the 12 months to June 14 pax of 756k on 904k seats - a load factor of 83.7%. We've already shown earlier in this thread that you can sustain an ULH A380 route with 80% load, so these routes pass that threshold.

The information is on page 37 and 38 of the pdf linked. What is even more interesting is that the pax numbers are showing a year on year increase of 35.6% - by the far the largest year on year growth out of any route into the USA. So, clearly there is strong demand for DXB-JFK (as you pointed out earlier in the thread, you thought that JFK would be perhaps the only, in your opinion, place that a DXB route could work) - but if we look at DXB-USA as a whole, the DoT also shows a year on year growth rate of 20.6% - beaten only by IST (21.3%) and PUJ (23.9%). That would be a signal to me to increase capacity...

As an aside, 2.3million pax to the USA, from DXB, of which 2.0 million are on EK works out at about 5480 seats a day: given the capacity of an ULH EK A380 is 489 pax, that's 11.2 A380s of pax load EK have to find seats for, daily.

I think this discussion also speaks to changing paradigms in air transport networks: historical discussion has been about "point to point" and "hub and spoke" and two clearly delineated camps - but with the emergence of the superhub model, where you have the aircraft utilisation of point-to-point models combined with the aggregation across multiple territories to bundle O&D demand, you are beginning to see new models emerge.

eternaltransit

I would certainly take that CX flight! But I think you see more Asia connections from east coast origins as the travel time is about a wash.

geminidreams

You seem to think that all the planes are loaded with Americans? On what do you base that assumption?

You have been told multiple times by people who actually fly Emirates that most people are transiting. The fact that Dubai is in the Middle East bears no relation to the end destination. There are many flights a day to Australia, India, China, Thailand etc which connect through Dubai.

If you need some understanding hop on an Emirates flight and see the load factors, see the clientele, see the number who are transiting and then come back when you educate yourself as to what the business model is, as you seem to have a totally closed mind to all the responses here that clearly summarise why Emirates can do what it does and make money without subsidy!