sailingfun

They are not serving those markets because they have to fly them at a profit. You talk load factor which does not have a lot of meaning relative to profit. Any flight can run high load factors at a below market cost. Emirates does not have to make a profit and no one really knows if they do or don't. Public companies in the US have to file extensive profit and loss statements that have to be certified by the CEO under criminal penalty if found to be false.
Once more, The Middle East airlines can open their books and end the controversy. I suspect they will choose not to for obvious reasons.

Ed Harley

I don't think you understand airline economics. Just because an airplane is full doesn't necessarily mean the flight makes money for an airline. It's about yields, and this is the argument that the L3 are making. The ME3 are capacity dumping and selling tickets at a loss because making a profit doesn't matter when you're being subsidized. How does an airline compete with this?

This and the increasing value of the US dollar is why Delta is reducing flights from Dubai.

Sink r8

That's fine, and I can understand your perspective. As long as we can agree that to the extent there are grievances, and to the extent they're legitimate, there should be remedies that address the transgressions, no more, no less. If the end result is that the ME3 retain their structural advantages (location and demographic factors), but remedy the damage caused by subsidies, and inadequate labor protections, we could move forward. Is that acceptable to you?

As far as the "legitimate" advantage enjoyed by the ME3 carriers, I understand how they benefit from demographic factors, and their geographical location, but those issues affect European carriers, not US carriers. There is no reason a ME3 carrier would have a natural advantage (geographic or demographic) in the Transatlantic market, except for subsidies, and labor law differentials.

I appreciate your slightly more nuanced viewpoint than some of the people that look the other way. I can accept the idea that the punishment needs to be tailored to the crime, but clearly, a wrong is being committed here that must be addressed.

Andy

The Dirham and most ME currencies are pegged to the USD so that negates your USD strength argument. UAE Dirham Will Remain Pegged To US Dollar ? Central Bank - Gulf Business

globalexpress

A few comments:

Not picking on Emirates in particular. IMO, they are lesser of the Big ME3 subsidy cases, but subsidized nonetheless.

Of course it's unbalanced. US airlines aren't going to make the big ME3's arguments for them. The response we receive (if we ever see one?) will be similarly unbalanced.

The US airlines aren't "whining" about anything. They just see what you admit to (subsidies) and want them ended. The US has negotiated over 100 Open Skies deals. The US airlines are very lean machines and can compete, but not against government sponsored airlines.

A new runway in Atlanta that the airlines have to pay for through landing fees is far different than than a government building a huge, shiny new airport in the desert for their "pet" airline, and the home airline not having to pay fees that cover the cost of capital used to build the airport because the government is picking up the tab. In the paper, it notes JUST THAT discount accounted for 50% of Emirates' profits, never mind the fuel hedging and other stuff. If O'Hare was Emirates' hub, it would be losing money every year. As I posted earlier, when landing fees at a GIANT, shiny new airport are 30% of the average US international gateway fee, something's very, very amiss.

Your "arm's length" transactions I disagree with. It's not the same as Delta owning its own refinery. Delta owns the refinery. If the refinery sells discounted Jet A to Delta Airlines, it will lose money. Delta owns the refinery. Delta Airlines also loses money. It's all the same entity. If the US government owned the refinery and sold discounted fuel to Delta, then I'd agree with you. Obviously, that doesn't happen in the US.

In Dubai, apparently a few people (sheikhs) own EVERYTHING, referred to as "Dubai Inc." If Dubai Inc sells discounted fuel to Emirates, Dubai Inc loses money. Dubai Inc is the government. Emirates buys this discounted product and it becomes a subsidy to the airline through the government. Add catering, ramp services, maintenance, etc., to the list. Who knows what Emirates really is paying for all of those services? They're not "arm's length" transactions.

But the best statement of all........I think it's a great idea to let some sort of neutral take a look at everyone's books and make a decision. Who cares what I say or you say? We're biased. I'm a US airline pilot and you're an Emirates airline pilot. Let the neutral have complete and unfettered access to all the airlines' books and let them decide what's going on. Problem is- it will never happen. No problem for the US and European airlines. They operate transparently because they have to. The Big ME3? He-he. They answer to no one, just like their kings and sheikhs. Does anyone honestly think an outside party would be allowed to penetrate "Dubai Inc?" Take a look at page 64 of the report. Does anyone think an outside party would be able to penetrate that sheikh/mafia flow chart? I love the idea of a neutral, but again, it would never happen.

Typhoonpilot

First of all, nice posts be Gillegan. He can always bring a very reasoned and well thought out perspective to any debate.

The second line of the above post has already been addressed by Andy.

I'll just make a comment on the first part. The other day I was looking at the best way to get from my home in the USA to Abu Dhabi, business class of course. I prefer Delta because I really like their Business Elite product, but DAL doesn't fly to Abu Dhabi. I ran a search on their website anyway and it came up with a connection in Amsterdam as the connecting possibility using KLM for the Amsterdam-Abu Dhabi leg. Round trip price was in the $7000 range. I set the search to include Dubai to pick up the DAL ATL-DXB service. I would actually prefer to do that and take a car from DXB to Abu Dhabi, but the price came back as over $10,000 round trip. No way I can justify the price differential to the travel department so I'll be stuck on a KLM A330 without lie flat seats if I choose the DAL/KLM option.

Round-a-bout way of getting to the point, but DAL's ATL-DXB service being full, especially in business, means the yields are anything but low.



Typhoonpilot

Sink r8

It's probably such a round-about way of making a point, that it isn't really a point at all. I don't see how you can infer anything meaningful about yields from the price of a single B/E ticket search. Not to mention the fact that we can't really understand the damage being done by looking at single city-pair, which in an of itself doesn't inform us as to whether the airlines in question are, or aren't violating Open Skies agreements.

I also struggle to understand how your home is in the US, you're a pilot for Emirates, and you answer to a travel department that would allow you to pay full-fare on a competitor.

Typhoonpilot

Granted it was just a single day, but based on Skyone's observations on that flight over the years I think it is pretty valid. Those ATL-DXB flights are full and DAL is charging a premium for the seats so it seems odd they are reducing service on the route. Timbo might be able to chime too in since he flies it quite often.

Also, I left Emirates in 2013 so no need to struggle on the second point




TP

Sink r8

Thanks, TP.

I still maintain that you don't, or shouldn't, have the tools to draw conclusions on yields based on anectdotal (or even accurate) info on load factors, or what an individual BE ticket is sold for.

As for the second point, are you currently a line pilot?

Gillegan

I agree, we all have our biases though I'm no longer an Emirates pilot. As far as having a neutral, I also agree and don't think asking them to open their books is too much to ask for. Whether they would or not - if this were arbitrated by some body like the WTO, I would think they would have to.