With the current downturn in the worldwide aviation industry, what is the success of both Emirates and Qatar Airways attributted to? As we all have seen, these airlines are expanding at a high rate with large orders for aircraft and expansions into many parts of the world. Are these airlines heavily subsidiezed by their respective owners (ie the governments of UAE and Qatar?) I understand that they offer superior service (at least this can be said for Emirates), but is this enough to lure pax from say Europe to Asia who would connect in DXB instead of one aircraft service to places like Sydney and Auckland?

Qatar is directly owned by the government.

Emirates is not, and finances its operations and capital projects with public funding.

N

The middle east is oil laden, and hence has endless amounts of oil related traffic coming and going every single day. Thus, I am guessing that a very high % of their seats are business travel as opposed to leisure travel.

Would make sense

J

Not sure about Qatar, but the UAE is promoting itself as a major tourist magnet as well as developing its high-tech industry and business, for the inevitable (when the oil runs out). Also the fact both airlines offer superior services in the air (their aircraft) and on the ground (their respective airport hubs), does convince people to make detours in their journeys or spend a few extra hours of flying.

ETstar-an excellent question! I myself wonder how can 2 airlines in the same region, (with relatively modest traffic), in just a short time amass a huge fleet and extensive route network in the midst of an industry downturn? I have heard great remarks about EK, but as you indicated how many people will transit DXB or DOH in lieu of nonstop or more direct routes. If this 2 airlines are successful it will probably hurt European carriers.

I myself wonder how can 2 airlines in the same region, (with relatively modest traffic), in just a short time amass a huge fleet and extensive route network in the midst of an industry downturn?

I understand its actually quite hard to find a seat on either carrier.

N

Gigneil-the point I was trying to make, (as well as ETstar), is that recently both carriers have placed large orders for new AC and commenced new routes. As I indicated I have heard lots of excellent feedback on EK. I did not imply there was not a market....I am more impressed/amazed at their rapid growth, especially Qatar Airways. In the late 90's they had 2 747SR's and a few A300's that primarily served the region-they seem to want to compete with EK at any cost, time will tell.

The Europe to Australia route via Dubai must be where EK gets a lot of PAX from, as well as from O&D.

Qatar and the UAE have shifted away from relying on oil and started promoting trade and investment. As a result, traffic to these two countries has skyrocketed.

Both Doha and Dubai are very lightly populated when you talk about the local population. Immigrants from Asia have flooded the country as well as the west. Business ties throughout the entire world have grown immensely and this is why both Dubai and Doha are seeing a lot of air traffic now as well as cargo traffic.

Emirates and Qatar Airways are able to make these huge aircraft orders because they are highly subsidized. Very very highly...

Anyways, the future is looking bright. When oil runs out, they should continue flourishing because of their less oil reliant infrastructure that they have established.

Other Gulf countries such as Saudi Arabia and Kuwait are starting to realize this and are preparing for the inevitable.

Regards

So, with both Qatar and UAE being lightly populated and apart from the O&D market that the airlines in question serve (mainly migrant workers from India, Pakistan, Philippines etc.), it is quite obvious that the airlines also take transiting passengers as being one of the top revenue sources. Both airlines' expansions into the UK and Australia/New Zealand (the latter applies only to EK) suggest that they must be taking up a chunk of business from other airlines, namely BA and Qantas (it's not like EK is a low fare competitor to BA and QA). Have there been obvious effects on the other airlines? (If O&D was the only market that warrants such service, then QA would have definitely been serving DXB - EK pretty much flies from all major Australian gateways.)

Also, is Emirates profitable, after subtracting the "heavy" subsidies it gets from its government?

Yes, Qatar Airways and Emirates do get a lot of transitting traffic.

However, I think many people would be surprised by the O&D numbers. And the O&D type traffic is from every part of the world. Not just from the migrant worker countries.

Regarding Emirates' profitability after subtracting the heavy subsidies, I'm not sure. With the amount of aircraft they ordered in a short period of time, probably not.

Regards

Qatar Airways - success provided for jointly by a dedicated and enthusiastic staff as well as the airline's amazing leader - Akbar Al Baker, without whom the airline would not be as great as it is today. He was the catalyst in its movement to become a leading airline.

-A330Fan1

A330Fan1 - Do you work as QR's PR? 

From what I see & hear Emirates clearly wants one thing & one thing only domination'! For a carrier to rely heavily on operating direct services to destinations and waiving away code sharing with a carrier.
Emirates is doing very well on the DXB-SYD service considering;
a)The ONLY carrier which provides a direct service from Europe to Australia  
b)Increasing capacity with a second daily service in June and not to mention a 3rd daily service early 2005!(Sydney service will receive a 3rd service)  

That's my 0.02c  

EK413

I remember I read somewhere that EK's President and Minister of Department of Transport U.A.E. is same person, is it true?
If so, EK can avoid spending time for approval etc for DOT and can do whatever EK wish timely without losing time, so this might be one of the strength.
Before 747-400 age, European, Asian carriers and QF used to make fuel stop at BAH or DXB, and at that time kind of opensky agreement benefitted them, but now EK seems to benefit from open sky like air agreement.

It seems that EK have very strict cost control, so in other words maybe kind of a very skilful management controlling cash flow and everything, contrary to some traditional airline originally government owned until 1980s.

In addition, if many countires import oil from UAE, and if they want to buid stable good relationship with U.A.E, then allowing EK generous landing slots is a piece of cake for the government certain countires, I think.

Correct me if im wrong but I think the UAE des not have any taxes on import/export of goods so it is like one big convention of buyers and sellers. Combine that with A airline that offers great service and that's the formula for success

These carriers also operate in business environments where they have low fuel costs, plenty of financing, no unions and/or human resources limitations (they can hire a pretty young female F/A and then fire her if she gains weight or gets old). Their crews work on short-term contracts... which the company is not obligated to renew.

I used to date an Emirates F/A, and I was amazed at their business model. Very good for making the business work, but US, Australian and European governments would never let a company have those sorts of liberties. But, in the UAE/Qatar, that is a part of normal business culture. Putting political correctness aside, it is what any manager would want.

As a note... my impression was that, regardless, Emirates has happy staff and the company takes very good care of them, without needing unions etc, so its not like they abuse the situation.

TexAussie

As a note... my impression was that, regardless, Emirates has happy staff and the company takes very good care of them, without needing unions etc, so its not like they abuse the situation.

I must agree with you on that one TexAussie!
Every time I work on EK aircraft either the SYD-AKL service or SYD-DXB service the crew seam very happy and most of all very helpful.

EK413

Emirates is set up primarily as a 6th freedom carrier - modelled after Singapore Airlines who functions similarly. Small country, small population, nil domestic routes, excellent airline, modern air hub, huge amount of air traffic.

I suspect that Qatar Airways has a similar set up as well.

AXESS

EK's President :H.H. Sheikh Ahmed bin Saeed Al Maktoum
Minister of Department of Transport: H.E Humaid Al Tayer.