Some media get it
11-17-2013, 07:48 AM
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Some media get it
Emirates buying airplanes: Dubai airline leads enormous gulf shopping spree.
MONEYBOX
A BLOG ABOUT BUSINESS AND ECONOMICS.NOV. 17 2013 10:26 AM
Gulf Airlines' Wild Shopping Spree
The Dubai Airshow is under way this weekend and the announcement there underscore the extent to which growth in the passenger aviation industry is concentrated in the Persian Gulf. Leading the way is Dubai's own Emirates, which announced plans to spend $20 billion on 50 Airbus 380 superjumbos and another $76 billion on 150 of Boeing's smaller 777X widebodies. Boeing is selling another 109 of those 77Xes to the region's other two airlines, Qatar and Etihad which also placed ordered for 30 of its 787 Dreamliners from Boeing. Last but not least FlyDubai said it would buy 100 of Boeing 737 narrowbody jets.
Since Boeing is winning the war for Gulf plane orders, that's good for American manufacturing and exports.
But it seems to me that the United States could and should be doing more to take advantage of the Persian Gulf aviation boom by allowing what are called "cabotage" or "fifth freedom" flights. Which is to say that Gulf airlines could operate flights that go from one North American city to another North American city rather than exclusively running flights from North America to Dubai, Abu Dhabi, or Qatar.
For example, right now Emirates doesn't fly to Philadelphia and also doesn't fly to San Jose presumably because of those cities is long enough to fill a jumbo flight to Dubai. And at the same time, no airline offers a direct flight from Philadelphia to San Jose. But perhaps a route that went San Jose - Philadelphia - Dubai would make sense for Emirates somewhat along the lines of their current JFK - Milan - Dubai route. Or there could be a San Diego - Houston - Dubai route that would allow Emirates to connect two cities it doesn't currently serve while offering some competition to United's current San Diego - Houston monopoly.*
Now of course it might just be that none of the Gulf airlines have any interest in running any routes like that. In which case, so be it. But on the face of it, all three of them seem to be scrambling to expand as aggressively as possible. And traditionally the main barrier to foreign carriers operating domestic routes has been regulatory. Governments have seen their regulatory role as defending the interests of airlines headquartered inside their country. But with airline competition waning in the United States, it's time for regulators to think about serving passengers by letting the foreigners in.
Matthew Yglesias is Slate's business and economics correspondent. He is the author of The Rent Is Too Damn High.
A BLOG ABOUT BUSINESS AND ECONOMICS.NOV. 17 2013 10:26 AM
Gulf Airlines' Wild Shopping Spree
The Dubai Airshow is under way this weekend and the announcement there underscore the extent to which growth in the passenger aviation industry is concentrated in the Persian Gulf. Leading the way is Dubai's own Emirates, which announced plans to spend $20 billion on 50 Airbus 380 superjumbos and another $76 billion on 150 of Boeing's smaller 777X widebodies. Boeing is selling another 109 of those 77Xes to the region's other two airlines, Qatar and Etihad which also placed ordered for 30 of its 787 Dreamliners from Boeing. Last but not least FlyDubai said it would buy 100 of Boeing 737 narrowbody jets.
Since Boeing is winning the war for Gulf plane orders, that's good for American manufacturing and exports.
But it seems to me that the United States could and should be doing more to take advantage of the Persian Gulf aviation boom by allowing what are called "cabotage" or "fifth freedom" flights. Which is to say that Gulf airlines could operate flights that go from one North American city to another North American city rather than exclusively running flights from North America to Dubai, Abu Dhabi, or Qatar.
For example, right now Emirates doesn't fly to Philadelphia and also doesn't fly to San Jose presumably because of those cities is long enough to fill a jumbo flight to Dubai. And at the same time, no airline offers a direct flight from Philadelphia to San Jose. But perhaps a route that went San Jose - Philadelphia - Dubai would make sense for Emirates somewhat along the lines of their current JFK - Milan - Dubai route. Or there could be a San Diego - Houston - Dubai route that would allow Emirates to connect two cities it doesn't currently serve while offering some competition to United's current San Diego - Houston monopoly.*
Now of course it might just be that none of the Gulf airlines have any interest in running any routes like that. In which case, so be it. But on the face of it, all three of them seem to be scrambling to expand as aggressively as possible. And traditionally the main barrier to foreign carriers operating domestic routes has been regulatory. Governments have seen their regulatory role as defending the interests of airlines headquartered inside their country. But with airline competition waning in the United States, it's time for regulators to think about serving passengers by letting the foreigners in.
Matthew Yglesias is Slate's business and economics correspondent. He is the author of The Rent Is Too Damn High.
11-17-2013, 09:29 AM
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Originally Posted by trenttdk
11-17-2013, 09:30 PM
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I'm sure the 'American pilot' barb was directed at me, not the author of the article....
You're correct, I'm not, and I only posted that to stir the pot a bit.
However, it does raise an interesting point. How would the US legacies fare in a head to head competition with others, not just Emirates, around the world? Landing and ATC fees would be the same. Ramp agents, baggage handlers etc would all be paid similarly. How would Delta, United, American 'service' stack up? If you don't think it would go well, then ultimately you're relying on government protectionism to survive. Do you vote in favour of protectionism and increased red tape, or free trade and less government protection? Which is better for the economy?
I'm sure it's a moot point because there's zero chance of this happening but it is still interesting to think about.....
You're correct, I'm not, and I only posted that to stir the pot a bit.
However, it does raise an interesting point. How would the US legacies fare in a head to head competition with others, not just Emirates, around the world? Landing and ATC fees would be the same. Ramp agents, baggage handlers etc would all be paid similarly. How would Delta, United, American 'service' stack up? If you don't think it would go well, then ultimately you're relying on government protectionism to survive. Do you vote in favour of protectionism and increased red tape, or free trade and less government protection? Which is better for the economy?
I'm sure it's a moot point because there's zero chance of this happening but it is still interesting to think about.....
11-17-2013, 09:38 PM
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Posts: 1,673
Originally Posted by trenttdk
I'm sure the 'American pilot' barb was directed at me, not the author of the article....
You're correct, I'm not, and I only posted that to stir the pot a bit.
However, it does raise an interesting point. How would the US legacies fare in a head to head competition with others, not just Emirates, around the world? Landing and ATC fees would be the same. Ramp agents, baggage handlers etc would all be paid similarly. How would Delta, United, American 'service' stack up? If you don't think it would go well, then ultimately you're relying on government protectionism to survive. Do you vote in favour of protectionism and increased red tape, or free trade and less government protection? Which is better for the economy?
I'm sure it's a moot point because there's zero chance of this happening but it is still interesting to think about.....
You're correct, I'm not, and I only posted that to stir the pot a bit.
However, it does raise an interesting point. How would the US legacies fare in a head to head competition with others, not just Emirates, around the world? Landing and ATC fees would be the same. Ramp agents, baggage handlers etc would all be paid similarly. How would Delta, United, American 'service' stack up? If you don't think it would go well, then ultimately you're relying on government protectionism to survive. Do you vote in favour of protectionism and increased red tape, or free trade and less government protection? Which is better for the economy?
I'm sure it's a moot point because there's zero chance of this happening but it is still interesting to think about.....
And there are a couple dozen foreign airlines trying for global domination. Good luck as the bubble will eventually burst.
11-17-2013, 09:41 PM
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Originally Posted by trenttdk
I'm sure the 'American pilot' barb was directed at me, not the author of the article....
You're correct, I'm not, and I only posted that to stir the pot a bit.
However, it does raise an interesting point. How would the US legacies fare in a head to head competition with others, not just Emirates, around the world? Landing and ATC fees would be the same. Ramp agents, baggage handlers etc would all be paid similarly. How would Delta, United, American 'service' stack up? If you don't think it would go well, then ultimately you're relying on government protectionism to survive. Do you vote in favour of protectionism and increased red tape, or free trade and less government protection? Which is better for the economy?
I'm sure it's a moot point because there's zero chance of this happening but it is still interesting to think about.....
You're correct, I'm not, and I only posted that to stir the pot a bit.
However, it does raise an interesting point. How would the US legacies fare in a head to head competition with others, not just Emirates, around the world? Landing and ATC fees would be the same. Ramp agents, baggage handlers etc would all be paid similarly. How would Delta, United, American 'service' stack up? If you don't think it would go well, then ultimately you're relying on government protectionism to survive. Do you vote in favour of protectionism and increased red tape, or free trade and less government protection? Which is better for the economy?
I'm sure it's a moot point because there's zero chance of this happening but it is still interesting to think about.....
11-17-2013, 09:43 PM
#8
Gets Weekend Reserve
Joined APC: Jul 2007
Posts: 3,616
That would be indeed dangerous for US carriers. It also wouldn't be too far-fetched and there are precedents to foreign passenger airlines operating US domestic pairings. Here's one:
http://airlineinfo.com/treaties/serbiamontenegro1.pdf
http://airlineinfo.com/treaties/serbiamontenegro1.pdf
11-17-2013, 10:26 PM
#9
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Originally Posted by trenttdk
I'm sure the 'American pilot' barb was directed at me, not the author of the article....
You're correct, I'm not, and I only posted that to stir the pot a bit.
However, it does raise an interesting point. How would the US legacies fare in a head to head competition with others, not just Emirates, around the world? Landing and ATC fees would be the same. Ramp agents, baggage handlers etc would all be paid similarly. How would Delta, United, American 'service' stack up? If you don't think it would go well, then ultimately you're relying on government protectionism to survive. Do you vote in favour of protectionism and increased red tape, or free trade and less government protection? Which is better for the economy?
I'm sure it's a moot point because there's zero chance of this happening but it is still interesting to think about.....
You're correct, I'm not, and I only posted that to stir the pot a bit.
However, it does raise an interesting point. How would the US legacies fare in a head to head competition with others, not just Emirates, around the world? Landing and ATC fees would be the same. Ramp agents, baggage handlers etc would all be paid similarly. How would Delta, United, American 'service' stack up? If you don't think it would go well, then ultimately you're relying on government protectionism to survive. Do you vote in favour of protectionism and increased red tape, or free trade and less government protection? Which is better for the economy?
I'm sure it's a moot point because there's zero chance of this happening but it is still interesting to think about.....
Globalisation is one of those issues that look good on paper,but tend to have some problems in real life.
In the constant drive to get everything cheap,we have put the hurt on US jobs. Now most of everything is made overseas. Cheap to buy,but the folks who get laid off may argue about the benies.
Protection is needed. You do not have to say no to the foreign carrier or company,but you do have to level the playing field. Example-- all pilots and fa s flying into the USA or over,must comply with FAA Rest and flight time rules if the rules are more lax in that country.
I would like all airlines to pay the same for the ramper and other jobs,since the guy working on the ramp in the ME or China makes a small fraction of what the American gets.
So level the field.Until then we cannot let it go to purely market driven economics.
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