jynxyjoe
Queso King
Well it's something at least.
Seggy on Emirates!
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wheelsup
Well-Known Member
Ok.
So they are doing what the U.S. carriers did for decades. Yet they are actually successful at it.
I was reading a blog today where someone bought a ticket, round trip, from NYC to London for travel in late January for under $400. It was on Norwegian Air.
I'm as frustrated as you are but I think you are looking at job preservation from a regulatory standpoint. Where we should be looking at it is saying OK, how can we compete with these entities? Is it even possible? If not the industry needs to approach the U.S. government and get relief from various onerous laws, and get the government to fix the inherit problems.
Otherwise it will just be a long road as our industry withers and dies, becoming feeders for the Emirates of the world.
What does Emirates pay? Are they significantly under paying where it's a cost based advantage, or is their management that much better? They seem to be very interested in investing back into the company, something US airlines aren't very good at doing.
Seggy
Well-Known Member
Look what they did to the Canadians and WHY they were successful.
I think with a systemic approach, which we are starting to see, we can be successful.
PhilosopherPilot
Well-Known Member
I went to Cambodia and Vietnam a few years back. Holy hell it was difficult to get there (and back) using a US carrier!
typhoonpilot
Well-Known Member
Not sure if I understand what you are trying to say with this post. Are you saying the Canadian government was successful? If so, I would disagree. They were successful in protecting Air Canada. However, in doing so they hurt their own economy to the tune of millions of dollars and possibly thousands of jobs. That's known as a win-lose scenario.
Here is the study by a Canadian consulting firm specifying the economic impact:
http://content.emirates.com/downloads/ek/pdfs/int_gov_affairs/Executive-Summary.pdf
TP
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typhoonpilot
Well-Known Member
I stand corrected on the Vietnam service. It isn't very good service, but it does exist on United.
The issue with the Alliance partners is that the flights don't match up very well. Every time I search a city pair using the alliances versus non-U.S. carriers. The alliances have super long layovers increasing the travel time to an unacceptable level. Take SGN-LAX for example. If you don't want to make two stops the only one stop option is through Tokyo on Air Japan with either a 9 or 10 hour layover in Tokyo. Otherwise you are going SGN-HKG-SFO-LAX.
Okay so let's talk Star Alliance. I look at SFO-HYD since the bay area has a very large ethnic Indian population and Emirates serves the market. What do I get for that? = SFO-IAH-EWR-DEL-HYD on UAL/Air India. Total travel time of 31:56. For the same price I can go on Emirates with one stop in Dubai and a total travel time of 21:50. That's no contest as far as I'm concerned and that's where the U.S. carriers or the U.S. carriers in cooperation with their alliance partners needs to improve in order to compete. It can be done, it's just they are not doing it for some reason.
TP
Seggy
Well-Known Member
Ahhhh, this is hardly a 'study'. Are you really saying that with a straight face??? As one can see on page 1 of the study it was prepared FOR Emirates by a hired gun consulting firm. I am sure Air Canada (or anyone) could have come up with a study that showed something different.
Uhh, we bought 49% of Virgin Atlantic.
Plus, I heavily suggest revisiting that wondrous blend of fact v. opinion.
Autothrust Blue
“If you jump on my shift, that’s just rude, man.”
Insert money, receive conclusions you want.
Seggy
Well-Known Member
If you look at the three non-stops on United from the USA (SFO, ORD, EWR) to HKG those flights arrive between 7:20PM and 8:45PM. The HKG to SGN flight leaves at 9:45PM. Seems like pretty good service to me.
You know as well as I know that you can't just randomly have one or two flights show up at a certain hour to make a seamless connection on that singular route. You have landing slot considerations, custom hours, domestic hub banks, etc. There is a lot of coordination within the STAR Alliance on hub banks within their partners. Yes, not all will work without a long layover, but most work exceptionally well.
Seggy
Well-Known Member
Exactly.
Cherokee_Cruiser
Bronteroc
Yes, but what does that really mean for Delta pilots? So far there has been metal/metal swap in a few bases (LAX and ATL).
I like how Delta can own 49% of Virgin Atlantic but when Branson owned 49% of Virgin America, ALPA flipped a lid on ownership.
Autothrust Blue
“If you jump on my shift, that’s just rude, man.”
Some people should take more probiotics.
I've been hella busy. When I'm working, I'm working, when I'm not working, I'm still working and I still have to get work done before, well, heading back to work.
Totally serious.
Autothrust Blue
“If you jump on my shift, that’s just rude, man.”
This is the first week in the last three months where I've not been gone 5 days or more. And then I moved and am moving again.
mrivc211
Well-Known Member
"Additionally, Emirates is owned by the government of Dubai. That government also owns its airport, its national bank, oil fields and refineries, and its air safety regulatory agency."
Dubai doesn't have any oil. Abu Dhabi does. But the typical airline guy in the US hears that fact, ignores it, flies the line, and complains to the Captain/co-pilot about unfair fuel advantages as Emirates taxies by.
Dubai's economy is finance and tourism and has been for over a decade. Before that, it was free trade. Before that it was fishing.
If you're @Seggy theory of fuel advantages is correct, how much are we talking here? Let's do a very small analysis of it. 50% of Emirates flights originate overseas. If your theory was correct, do you think Emirates puts the fuel on ships and sends it to their destinations? They are paying the same price as others at these airports.
Next, the gov't doesn't do business in oil. Abu Dhabi does. Abu Dhabi doesn't give their fuel to Dubai free of charge. It is sold to them at a profit. So when the oil is brought up from the ground, then refined, its sent over to the airport and sold to ALL the airlines. As we all know, the cost to do this isn't cheap. Even if they did get the fuel at cost, which they don't, it would still cost them close to what others are paying for their fuel. It's extremely labor intensive and expensive to transport fuel. My brother's company fuels 80% of commercial aircraft in Afghanistan, as well as transport the fuel across the country. While Afghanistan's terrain is not the same as the UAE, it is still expensive to transport fuel. When the fuel is refined across the UAE and brought to the DXB airport, it's not cheap. It's not free, not even close.
My general opinion about Emirates and the ME3 is that the players who have ruled the skies for decades are seeing their market share eaten up by a better run, better executed, better airline hands down, and are crying like a 7 year old who didn't get his churro at Disneyland.
If EK has enough money to negotiate better terms with their partners across all bases of their business, then thats considered being good at business. In any business, being well financed always buys you better negotiating leverage. Perhaps all of these factors combined is whats making EK so successful.
Dubai doesn't have any oil. Abu Dhabi does. But the typical airline guy in the US hears that fact, ignores it, flies the line, and complains to the Captain/co-pilot about unfair fuel advantages as Emirates taxies by.
Dubai's economy is finance and tourism and has been for over a decade. Before that, it was free trade. Before that it was fishing.
If you're @Seggy theory of fuel advantages is correct, how much are we talking here? Let's do a very small analysis of it. 50% of Emirates flights originate overseas. If your theory was correct, do you think Emirates puts the fuel on ships and sends it to their destinations? They are paying the same price as others at these airports.
Next, the gov't doesn't do business in oil. Abu Dhabi does. Abu Dhabi doesn't give their fuel to Dubai free of charge. It is sold to them at a profit. So when the oil is brought up from the ground, then refined, its sent over to the airport and sold to ALL the airlines. As we all know, the cost to do this isn't cheap. Even if they did get the fuel at cost, which they don't, it would still cost them close to what others are paying for their fuel. It's extremely labor intensive and expensive to transport fuel. My brother's company fuels 80% of commercial aircraft in Afghanistan, as well as transport the fuel across the country. While Afghanistan's terrain is not the same as the UAE, it is still expensive to transport fuel. When the fuel is refined across the UAE and brought to the DXB airport, it's not cheap. It's not free, not even close.
My general opinion about Emirates and the ME3 is that the players who have ruled the skies for decades are seeing their market share eaten up by a better run, better executed, better airline hands down, and are crying like a 7 year old who didn't get his churro at Disneyland.
If EK has enough money to negotiate better terms with their partners across all bases of their business, then thats considered being good at business. In any business, being well financed always buys you better negotiating leverage. Perhaps all of these factors combined is whats making EK so successful.
A Life Aloft
Well-Known Member
This is also some food for thought:
US airlines focus on Gulf airlines while ignoring subsidies to their own partners
Mr Anderson has recently been more careful with his words, saying Gulf airlines benefit from national policies like low or no taxes. References like "foreign airlines receiving government subsidies" (as Mr Anderson told a US House committee hearing in Jun-2014) are abstract and do not explicitly point fingers, even if the targets are obvious.
Mr Anderson's more focussed attack is on the topic of government-owned airlines. Yet this implies a system in which no others are government owned - or at least not liable to criticism. Mr Anderson singles out Gulf airlines while ignoring for example his own partners, many of which are government-owned, and some of which have received considerable subsidies, whereas Gulf carriers have received no known direct subsidies, aside from Emirates' seed capital at its launch.
Delta has a JV with Alitalia, which has received EUR2.7 billion in capital injections from the government. More recently, the Italian government orchestrated behind the scenes funding from private companies via political horse-trading. That proved not to be enough and the Italian government eventually gave its blessing to Etihad in Aug-2014 to take a stake in Alitalia.
As part of the Alitalia-Etihad deal, shareholders (once again mobilised by the government), agreed to inject more capital or restructure existing debt amounting to EUR1.2 billion. This would seem to conflict with Mr Anderson's Jun-2014 support of policies "allowing US airlines to compete in international markets free of government distortions".
See related report: Etihad & Alitalia agree and affirm their partnership vision. Protectionist voices will become louder
Delta's Chinese partners, with which it says it hopes to one day have a JV, are government-owned and receive subsidies. China Southern, for example, would not have been operationally profitable in 1H2014 without subsidies. China Eastern's North American network is unprofitable but China Eastern will grow it, partially at the request (perhaps unofficially) of the government.
And there are historical examples, such as the nearly EUR3.9 billion Air France received in the 1990s.
American and United also have partners who – unlike the Gulf carriers – are known to have received direct subsidies. American's Pacific partner Japan Airlines received from a state-controlled investment fund a capital injection of JPY350 billion (USD4 billion), which gave JAL a lower cost base than All Nippon Airways, a partner with United.
United's Star Alliance is often the most vocal against Gulf carriers but the Emirates study identified significant subsidies Star carriers have received.
http://centreforaviation.com/analys...tency---but-it-makes-for-good-politics-192138
US airlines focus on Gulf airlines while ignoring subsidies to their own partners
Mr Anderson has recently been more careful with his words, saying Gulf airlines benefit from national policies like low or no taxes. References like "foreign airlines receiving government subsidies" (as Mr Anderson told a US House committee hearing in Jun-2014) are abstract and do not explicitly point fingers, even if the targets are obvious.
Mr Anderson's more focussed attack is on the topic of government-owned airlines. Yet this implies a system in which no others are government owned - or at least not liable to criticism. Mr Anderson singles out Gulf airlines while ignoring for example his own partners, many of which are government-owned, and some of which have received considerable subsidies, whereas Gulf carriers have received no known direct subsidies, aside from Emirates' seed capital at its launch.
Delta has a JV with Alitalia, which has received EUR2.7 billion in capital injections from the government. More recently, the Italian government orchestrated behind the scenes funding from private companies via political horse-trading. That proved not to be enough and the Italian government eventually gave its blessing to Etihad in Aug-2014 to take a stake in Alitalia.
As part of the Alitalia-Etihad deal, shareholders (once again mobilised by the government), agreed to inject more capital or restructure existing debt amounting to EUR1.2 billion. This would seem to conflict with Mr Anderson's Jun-2014 support of policies "allowing US airlines to compete in international markets free of government distortions".
See related report: Etihad & Alitalia agree and affirm their partnership vision. Protectionist voices will become louder
Delta's Chinese partners, with which it says it hopes to one day have a JV, are government-owned and receive subsidies. China Southern, for example, would not have been operationally profitable in 1H2014 without subsidies. China Eastern's North American network is unprofitable but China Eastern will grow it, partially at the request (perhaps unofficially) of the government.
And there are historical examples, such as the nearly EUR3.9 billion Air France received in the 1990s.
American and United also have partners who – unlike the Gulf carriers – are known to have received direct subsidies. American's Pacific partner Japan Airlines received from a state-controlled investment fund a capital injection of JPY350 billion (USD4 billion), which gave JAL a lower cost base than All Nippon Airways, a partner with United.
United's Star Alliance is often the most vocal against Gulf carriers but the Emirates study identified significant subsidies Star carriers have received.
http://centreforaviation.com/analys...tency---but-it-makes-for-good-politics-192138
Seggy
Well-Known Member
So the US Energy Information Administration is wrong?
http://en.wikipedia.org/wiki/Oil_reserves_in_the_United_Arab_Emirates
From my understanding the finance and tourism was put in place for the government to have a future, once the oil ran out. Hence why they are taking their state subsidized airlines to the level they are at.
They use the fuel advantage the same way Delta is hoping to use their refinery they bought.
I am sure they have pipelines that cover the area well.
Easy to do when you don't have the same labor laws other airlines have to deal with, have the government subsidize your growth, etc.
The reason why EK is doing so well is because they gain an advantage from the laws they don't have to deal with, their ruthlessness in their growth/business practices, and an unfair advantage.
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