Originally Posted by globalexpress

Not specifically directed at TP, but to those who are taking the sheikh's side of the debate....

I read on Yahoo! Finance that Emirates is supposed to be writing some sort of rebuttal to all the points made in the white paper. I would think that their glossy magazine article hit piece with a "oh no we didn't" response is not the formal response to the charges.

He can strongly deny whatever he wants. The reader of the magazine (both this one and the one that hopefully will come out in the future with actual facts and numbers) has to remember that Tim Clark is the "Baghdad Bob" of Emirates. He works for an authoritarian regime with little transparency. Of course he is going to strongly deny everything. "There are no American infidels in Baghdad." Got it Tim.

The problem I see is that he could have simply laid out factual data in the article, but he didn't. The only thing that comes close is page 3, but it is totally lacking the detail the U.S. airlines provide in their charges. In response to the fuel hedges, he has some convoluted story, when all he had to do was say, "Hey we had XX million dirhams in the bank on the date the fuel hedges required payment, the expired contracts cost YY million dirhams, and when we accounted for the losses we had ZZ million dirhams left over. See? We had plenty of cash to cover the losses and therefore didn't need government help."

Then he could have pointed to the accounting in the airline's annual report that justified XX, YY, and ZZ. But he didn't do that. Why not? That would be so easy. Take a look at Delta's (for example) last quarterly report. They clearly state the write down they're going to take due to their hedging losses and you can see their cash flow and their cash balance. Easy for a U.S. airline. Hard if you're an airline run by an absolute monarchy apparently?

Same thing with the landing fee/airline subsidy debate. Notice the choice of words: "Emirates pays the full published rates at DXB." Yeah, Timmy, the published rates are the problem. They're too low to cover the cost of the money needed to support a shiny new airport's operation in an expensive country. He talks about Singapore and Hong Kong making significant investments in their airport infrastructure (and they are, AW&ST recently talked about the huge changes that will be happening in SIN and HKG in the near future), but then fails to compare the rates at DXB to those airports and instead chooses KUL. KUL? The charge being leveled against Emirates is that the DXB is not charging Emirates enough in fees, taxes, whatever, to cover the cost of a hugely expensive airport, and not having to pay those fees are a subsidy when the sheikh is picking up the tab.

The last comments about stealing revenue and passengers......I'll agree with his statement that passengers aren't propietary property of anyone. But if you're dumping subsidized capacity in a market, allegedly illegally, then yes, you are stealing revenue and passengers. If Emirates is dumping an A380 into a market with first class suites with showers, new airplanes, and better service only because a sheikh is propping them up financially, then yeah, it's stealing.

"We offer a great product at a competitive price, which appeals to the consumers who choose to fly with us," is stated in the article, but the real question is, could Emirates afford (or the market sustain) this great product at a competitive price if Emirates had to abide by the rules of Open Skies and did not receive significant subsidies? Probably not, but again no hard proof was provided in the article.

Since I find myself repeating the same thing over and over, I'm done after this less than pithy response. I'm anxiously awaiting the "real" response from Emirates, although with the lack of transparency an absolute monarchy/authoritarian regime provides, I doubt we'll ever be able to peek behind the veil.