This is how cabotage starts

Can anybody put together a scenario where it could be good for pilots, beyond limiting to American crews? Obviously, unfair trade practices would put the old majors at risk, but would anybody care if the old names faded away if pay and benefits improved?

It seems the likely losers would be veteran captains in the majors but I can't see how we aren't going to see a leveling of 121 pay across the major-regional spectrum anyway.
 
It largely depends on fuel cost... We pay 750€/ton, for an 11h flight we usually take 81-82t with 275 pax. So that's 59000€ of fuel. Add to that all the rest it's still a small margin business with slightly higher than average fare. A reroute and you pretty much burn the margin... Most of these companies usually operate at lost, are behind airplane lease payments and end up going belly up taking with them a lot if people. Air Comet got its 340-300 seized in Bogota on a dec. 31st and the pax helped paying for the flight crew tickets for their return trip....
 
Hammertime said:
Yep. Paying it to themselves. They admit on their website that they are paying a sister corporation under the umbrella of the UAE govt corp.
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If you (or anyone else) have a way that demonstrates that Emirates is paying less than 34% of their revenue out in fuel costs, please let me know exactly how this works. That would be a game changer.

Joe
 
JOEFRIDAY2 said:
If you (or anyone else) have a way that demonstrates that Emirates is paying less than 34% of their revenue out in fuel costs, please let me know exactly how this works. That would be a game changer.

Joe
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The Emirate of Dubai does not have large oil reserves like some Middle Eastern countries. Emirates aircraft tanker fuel inbound to Dubai from places they can buy it cheap, like Kuwait. I even tankered fuel in from LHR many years ago because it was cheaper there.

You are barking up the wrong tree if you think that argument holds any water.


TP
 
typhoonpilot said:
The Emirate of Dubai does not have large oil reserves like some Middle Eastern countries. Emirates aircraft tanker fuel inbound to Dubai from places they can buy it cheap, like Kuwait. I even tankered fuel in from LHR many years ago because it was cheaper there.

You are barking up the wrong tree if you think that argument holds any water.


TP
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The U.A.E. has large reserves. If you follow the dollars and dirhams, the U.A.E. really functions as one state with regards to their oil industries with most of the money flowing through Dubai. U.A.E. is number 7 in oil reserves and Dubai, if considered alone would be in the top 20 or 25 worldwide.

U.A.E. has also always been a big jet fuel producer, at least in the past 20 years.
 
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Yes, he is sure.

Dubai
Tuesday, 12 November 2013

"High fuel costs and weak currencies in some key markets held back first-half profit growth at Dubai’s flagship airline Emirates, signaling the Gulf’s fast-growing carriers are not immune from a slowdown in the global aviation industry.

Emirates, ranked No.1 globally in terms of international passengers carried per kilometer flown according to IATA, reported a net profit of 1.7 billion dirhams ($463 million) for the six months ended Sept. 30, up 2 percent from the corresponding period in 2012, it said on Tuesday.

The company did not provide figures for the year-ago period but in the first-half of 2012, Emirates’ net profit had more than doubled.

Emirates and its home base Dubai are betting that its location - a third of the world’s population is within a 4-hour flight radius - will continue to attract passenger traffic away from other global hubs such as London, New York and Singapore.

“High fuel prices, accounting for 39 percent of our expenditures, and the unfavorable currency exchange environment continue to eat into our profits,” Sheikh Ahmed bin Saeed al-Maktoum, the chairman and chief executive of Emirates said in an emailed statement.

Emirates, the world’s largest customer of the Airbus A380 superjumbo, said revenue for the period was 39.8 billion dirhams ($10.8 billion), up 12 percent from the prior-year period.

It carried 21.5 million passengers, up 15 percent, and flies to 137 destinations in 77 countries.

Net profits for the wider Emirates Group, which includes its airline services arm, Dnata, rose 4 percent to 2.2 billion ($599 million) dirhams.

The airline is set to increase its fleet further with a much-anticipated mega-order for the Boeing’s revamped 777X jets at the Dubai Air Show next week."

And from their CEO January of this year:

http://gulfbusiness.com/2014/01/ceo-predictions-2014-tim-clark-president-emirates/#.UwAo1IWuiPM

Despite our longstanding nemesis of fuel costs, and the weakening of major currencies against the US Dollar, Emirates posted a modest two per cent profit growth to Dhs1.7 billion at the end of the half year to September 30.
 
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A Life Aloft said:
Yes, he is sure.
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There is a difference between reserves and production. He said reserves.

Not that you can get a handle on fuel prices by looking at production, you need to also look at jet fuel production....and currency strength, among other factors.
 
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Dubai’s oil reserves have been reduced greatly over the past decade and are now expected to be exhausted within 20 years or less. The main fields are offshore in Fateh, Southwest Fateh and two smaller fields, Falah and Rashid. The only onshore deposit is the Margham field.

UAE is 7th on the list of oil reserves by country. Venezuela, Saudi Arabia, Canada, Iran, Iraq and Kuwait have the largest reserves in that order.

Dubai is currently exploring a possible new off shore field for production, but as far as I know that is not completed yet. Their oil production peaked in 1991 and has been on the decline since then. They currently have just about 4 billion barrels in reserve. UAE has about 97 billion in reserve.
 
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A Life Aloft said:
Dubai’s oil reserves have reduced over the past decade and are now expected to be exhausted within 20 years. The main fields are offshore: Fateh, Southwest Fateh and two smaller fields, Falah and Rashid. The only onshore deposit is the Margham field. Dubai Petroleum Company (DPC) is the main operator.

UAE is 7th on the list of oil reserves by country. Venezuela, Saudi Arabia, Canada, Iran, Iraq and Kuwait have the largest reserves in that order.
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Curiously, is Mexico in the top 10?
 
MikeD said:
Curiously, is Mexico in the top 10?
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Actually no. I read Gulf news from time to time and EIA and this is the most recent list from late December last year:

Venezuela 296.7 billion barrels in reserve
Saudi Arabia 267.9
Canada 173.1
Iran 154.6
Iraq 141.4
Kuwait 104.0
UAE 97.6
Russia 80.0
Libya 48.0
Nigeria 37.2

In looking at Mexico, they have 10.12 billion in reserves as of last year. Brazil has 14.7 billion but they are also in the processing of developing new off shore oil fields and actually found one last September that is supposed to be very large.
 
When sovereign wealth turns into sovereign debt, states like the Emirates start looking like other countries and face similar economic realities. Manipulating oil production and jet fuel refining to make the Emirates more profitable is obviously a low priority. That's the least of their problems.

In the 90's, the idea of freeing Dubai and the other Emirates from a petroleum-based economy seemed like a worthy goal. There's probably not enough oil in the ground in Dubai to solve their problems. That's more a comment on the size of their problems than the size of their reserves. Dubai would probably have fared better as a Saudi-style petroleum economy with a currency tied to the dollar than the path they have taken.
 
typhoonpilot said:
If they were using Liberia or some other poverty stricken corrupt African nation I might tend to agree with you on this.
They are not, they are using an EU member country. Ireland has a lower corporate tax rate than many other EU nations.
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So you agree with me that it's flag of convenience.

Once again HOW is Ireland going to give oversight to an airline that doesn't even operate in their country?

It is not dissimilar to a U.S. corporation choosing Delaware or Nevada to incorporate in versus their actual place of business. You might find some large U.S. major airlines are incorporated in Delaware even though they don't fly there :)
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It is dissimilar.

The FAA has oversight of airlines on the federal level not the state level. You know, they are called the FARs, not the SARs. So even though the airline may be incorporated in Delaware, the FAA can do a ramp check in Los Angeles. Once again, how can a country have oversight of an AOC when they don't even fly to that country?
 
typhoonpilot said:
This is the problem with ALPA. They come up with these boogie men and some weak arguments as to why and convince the membership that a fight needs to happen. Then the fight is lost before it even began due to the weakness of their arguments.
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The are only weak arguments if you want to ignore them.

Kind of like arguing against Emirates' MXP-JFK service when DAL and UAL fly NRT to a whole bunch of Asian cities.



Typhoonpilot
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UAL and DAL aren't state backed national airlines, like Emirates is. No matter how you break it down, or what you say, the Gulf State Airlines are a big shell game funneling money into the government. UAL and DAL don't have the guarantee of survival, Emirates does.
 
UAL and DAL have both (or will both) benefited from Chapter 11 and wether you like it or not, it's somehow a state backing (our good friend Wikipedia explains that a chapter 11 is filed with the FEDERAL bankruptcy court to obtain protection etc. Notice the FEDERAL). This refusal to acknowledge that US airlines have, do or will receive help, protection from the federal government is so hypocrite it makes me want to eat my sidestick. The same way Boeing whines about Airbus being state funded it is just the same state funded through its military branch thanks to massive corruption to obtain contracts (see the scandalous 330 vs 767 case that landed Boeing execs in jail for corruption and yet that got the 767 selected). So please stop thinking that brave US companies are surrounded by a bunch of lazy and state funded airlines because it is wrong.
 
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