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Why Does EK Need All These High Capacity Aircraft?  
User currently offlineDevil505x From United States of America, joined Dec 2003, 232 posts, RR: 0
Posted (9 years 2 days 9 hours ago) and read 7328 times:

After reading about EKs order for 20+ 777s and how they are getting the A380 and A340-6s in addition I was wondering WHY do they need these high capacity/ long haul aircraft in a country of maybe 3 million people? I really wonder about this because in the US it seems airlines are introducing more and more regional jets into their fleets as this does offer better economics for both the airline and passengers in the United States economic environment.

I believe it is safe to say based on this reasoning(pop. of < 3mil vs US 350mil) EKs need for such aircraft is not for domestic purposes. That leads me into 2 more questions; Where is the demand for EKs long haul high capacity international service coming from? Does the economic environment in the UAE vs that of the USA require EK to have such a fleet?

45 replies: All unread, showing first 25:
 
User currently offlineEKGOLD From Australia, joined May 2005, 207 posts, RR: 6
Reply 1, posted (9 years 2 days 4 hours ago) and read 7194 times:

A bit of a geography lesson needed.....

The UAE is not the USA so making any comparison to USA strategies is fundamentally wrong.... However it sits bang in the middle of Europe, Africa and Asia. Hence it has a possible market of in excess of 3/4 of the world population... It is possible to connect major destinations in those regions via Dubai with one stop. Therefore it operates as a transit hub..

It needs these wide body aircraft (and lots of them...) to keep up with the growing demand for its products within the markets that it serves.... Only a small percentage of its total passengers actually stop over in Dubai.

Any number of threads have been started on EK...


User currently offlineB6sea From United States of America, joined Aug 2005, 340 posts, RR: 0
Reply 2, posted (9 years 2 days 3 hours ago) and read 7153 times:

Quoting EKGOLD (Reply 1):
The UAE is not the USA so making any comparison to USA strategies is fundamentally wrong

Agreed. The UAE is smack dab in the middle of the European African Asian Australian (I dont know what you'd call it). And because of such a lucky location on the map, can be more thought of as ATL (in a hub sense not a geographical one) but with widebodies instead of MD-80s and 737s. Also the city of Dubai in and of itself is an attraction like the world has never seen before, kind of like Orlando mixed with Las Vegas with hotel occupancy topping out at or around 100% year round. Maybe that adds some perspective So in terms of the US, ATL+MCO+LAS+some more=DXB

-Chans


User currently offlineTinkerBelle From , joined Dec 1969, posts, RR:
Reply 3, posted (9 years 2 days 3 hours ago) and read 7127 times:

Man-o-man! Not another EK's fleet therad. Do a search on this and you'll find at least 5 threads in the last week with the same question.

Anyways, DXB is a major hub which might very well become the largest hub in the world in coming years. They need the aircraft to pretty much fly anywhere in the world they please being they are almost in the middle of Asia, Europe and Africa. It really has nothing to do with UAE's population because they are not limited to carrying UAE's passengers only.

You're right about one this though. The widebodies are not meant for domestic use. Don't forget Dubai is becoming a mojor tourist attraction too. The demand for EKs long haul high capacity international service is coming from DXB being a major international hub, period.

Quoting Devil505x (Thread starter):
Does the economic environment in the UAE vs that of the USA require EK to have such a fleet?


Their fleet has nothing to do with the country's economic environment and there's no reason to compare Dubai to the US. Dubai is one of the richest countries in the world though, thanx to a sh*tload of oil

With that said, I still can't figure out why they need soo many aircraft unless they really will become a major leasing company as has been suggested here many times.


User currently offlineCentrair From Japan, joined Jan 2005, 3598 posts, RR: 20
Reply 4, posted (9 years 2 days 3 hours ago) and read 7066 times:

I figure that what EK wants is the ability (once all these planes are added with their current fleet) to move close to 55,000~60,000 people a day from all corners of the globe.

As Africa develops and opens up, connecting East Asia to Africa is going to be hard without some nice places to change planes. Enter Dubai.

Right now Dubai is a uber-rich person paradise. Soon they want to start getting more middle-class travelers. To do that they need planes that can bring cost down and move them from again all corners of the globe.

The thing is will it be sustainable. Right now Dubai is pretty much an MSP type situation. But soon Doha will start picking up taking some of the bite out of Dubai, other airlines will want access to Dubai and EK will loose some of their dominance.



Yes...I am not a KIX fan. Let's Japanese Aviation!
User currently offlineBeaucaire From Syria, joined Sep 2003, 5252 posts, RR: 25
Reply 5, posted (9 years 2 days 2 hours ago) and read 7028 times:

They most likely are considering becomming the world's first global low-cost carrier...
Some interesting statements from EK's CEO went into that direction,associating Gambling on London-Oz flights to bring prices for a LON-SYD ticket down to 400 £. He claims the A380 would be a perfect tool to offer very low fares...



Please respect animals - don't eat them...
User currently offlineConcorde001 From United Kingdom, joined Jan 2005, 1230 posts, RR: 3
Reply 6, posted (9 years 1 day 23 hours ago) and read 6832 times:

Quoting B6sea (Reply 2):
Agreed. The UAE is smack dab in the middle of the European African Asian Australian (I dont know what you'd call it).

Eurasia or Middle East


User currently offlineAsgeirs From Iceland, joined May 2001, 516 posts, RR: 1
Reply 7, posted (9 years 1 day 22 hours ago) and read 6807 times:

Quoting TinkerBelle (Reply 3):
Man-o-man! Not another EK's fleet therad. Do a search on this and you'll find at least 5 threads in the last week with the same question.

Hmm, I read the forums on a daily basis and I can't say I've come across this question before and I have often wondered about this myself, but never actually gotten around to seeking for an answer.



Reykjavik Aviation Photography - Just bring the aircraft to us and we'll photograph them! :-)
User currently offlineUnited Airline From Hong Kong, joined Jan 2001, 9191 posts, RR: 15
Reply 8, posted (9 years 1 day 21 hours ago) and read 6684 times:

A few analyst predicted that 99% of these orders will be cancelled. Well only time can tell.....

Quoting TinkerBelle (Reply 3):
Dubai is one of the richest countries in the world though, thanx to a sh*tload of oil

Not in terms of GNP and per capita GNP. For now it is not a major business/financial centre.

From what I heard, Dubai has oil but not a lot. It's Abu Dhabi that has lots of oil.

[Edited 2005-11-21 13:51:39]

User currently offlineAirbusA6 From United Kingdom, joined Apr 2005, 2022 posts, RR: 0
Reply 9, posted (9 years 1 day 20 hours ago) and read 6593 times:

Well, at the moment Dubai is a nice place to change planes. Whether it still will be nice when there are 30 A380s and 20 77Ws worth of people changing planes at the same time is another matter....


it's the bus to stansted (now renamed national express a4 to ruin my username)
User currently offlineRampart From United States of America, joined Aug 2005, 3151 posts, RR: 6
Reply 10, posted (9 years 1 day 20 hours ago) and read 6590 times:

Quoting Concorde001 (Reply 6):
Quoting B6sea (Reply 2):
Agreed. The UAE is smack dab in the middle of the European African Asian Australian (I dont know what you'd call it).

Eurasia or Middle East

True that the Gulf Region is a geographic center for a whole lot of world population. Interesting to think what could have developed, or what will develop, from that. But, Africa & Australia are not part of Eurasia, and the "Middle East" more specifically refers to the region west of Afghanistan, east of Egypt, and south of the Black Sea.

"Gondwana" is the accepted term for the ancient geologic supercontinent you mention.

Just having fun with the geography at your expense, my apologies.

-Rampart


User currently offlineJetMaster From , joined Dec 1969, posts, RR:
Reply 11, posted (9 years 1 day 20 hours ago) and read 6563 times:

Quoting United Airline (Reply 8):
A few analyst predicted that 99% of these orders will be cancelled. Well only time can tell.....

Analysts have predicted EK's end for many years...

Quoting United Airline (Reply 8):
For now it is not a major business/financial centre.

With all the current and future investments, it's on the best way.


Regards,
JM


User currently offlineFlying-b773 From Singapore, joined Apr 2001, 390 posts, RR: 0
Reply 12, posted (9 years 1 day 18 hours ago) and read 6436 times:

Why? because they are trying to make some other airlines go bust...
So perhaps in years to come we will only have a few airlines... Snap more pictures before they are gone.. haha

Yah, maybe you can fly LHRdxbSYD with EUR50...


User currently offlineUnited Airline From Hong Kong, joined Jan 2001, 9191 posts, RR: 15
Reply 13, posted (9 years 1 day 18 hours ago) and read 6382 times:

Quoting JetMaster (Reply 11):
With all the current and future investments, it's on the best way.

It's a tourist centre but far from being a business/financial centre. Only time can tell whether or not they will succeed.


User currently offlineHiJazzey From Saudi Arabia, joined Sep 2005, 872 posts, RR: 1
Reply 14, posted (9 years 1 day 18 hours ago) and read 6340 times:

I don't understand Emirate's acquisitions. They're ordering too many and too big. I wonder what kind of plane they would use on thinner routes or short haul?

Quoting United Airline (Reply 13):
It's a tourist centre but far from being a business/financial centre. Only time can tell whether or not they will succeed.

You're right, and there are a few clouds appearing on the horizon. But even if Dubai's bubble bursts it won't dissappear.


User currently offlineMika From Sweden, joined Jul 2000, 2881 posts, RR: 4
Reply 15, posted (9 years 1 day 13 hours ago) and read 6102 times:

Quoting HiJazzey (Reply 14):
They're ordering too many and too big

I am sure that EK's own management knows that better than you and hence are not making any easy mistakes when it comes to fleet expansion.


User currently offlineLumberton From United States of America, joined Jul 2005, 4708 posts, RR: 20
Reply 16, posted (9 years 1 day 13 hours ago) and read 6079 times:

Quoting Beaucaire (Reply 5):
Some interesting statements from EK's CEO went into that direction,associating Gambling on London-Oz flights to bring prices for a LON-SYD ticket down to 400 £. He claims the A380 would be a perfect tool to offer very low fares...

And therein lies part of the explanation for question asked by this thread. EK intends to be the price leader in the market place. With all this capacity, outstanding in-flight service, and cost control, they aim to D-E-C-I-M-A-T-E the competition in these nice, profitable markets for BA, LH, QF, SQ, et. al. I'm sure they intend to open up some "new markets", but with all this new metal I strongly suspect they plan on going head to head with the current international superstars. Will the great international carriers be able to adapt? Given the competition of the LCCs like Ryanair and Easyjet, I don't believe there's going to be a windfall in those markets to compensate for the battered profit margins once EK's assault begins in earnest.



"When all is said and done, more will be said than done".
User currently offlineHiJazzey From Saudi Arabia, joined Sep 2005, 872 posts, RR: 1
Reply 17, posted (9 years 1 day 13 hours ago) and read 5944 times:

Quoting Mika (Reply 15):
I am sure that EK's own management knows that better than you and hence are not making any easy mistakes when it comes to fleet expansion.

Your aggressive reply is totally uncalled for. I stated my opinion. This is what a discussion forum is for.


User currently offlineMSYYZ From Canada, joined Oct 2005, 851 posts, RR: 8
Reply 18, posted (9 years 1 day 13 hours ago) and read 5814 times:

Dubai has become a major Tourist attraction in the Middle East , in 2005 they had 5 Million visitors and that number is expected to grow to 15 Million in 2010 .
Over and above , Emirates are expanding with new routes to Latin America and considering to double their flights to Australia from 42 to 84 flights weekly .

[Edited 2005-11-21 21:46:18]


A346,A343,A342,A332,A333,A310,A300,AB6,A319,A320,A321,B741,B744,B777,B767,B732,B735,B727,B707,B757,MD80,F-70,E-170,B738
User currently offlineIMatAMS From Netherlands, joined Feb 2005, 317 posts, RR: 0
Reply 19, posted (9 years 1 day 13 hours ago) and read 5769 times:

The whole point with Dubai and EK, as far as i've read in newspaper articles etc, is that their oil deposits are gradually declining, and will in the not too distant future run out. So what the sheik is aiming for is a long-term alternitive source of income if that happens. By using the oil-money to transform Dubai into a major business and tourism centre and EK into a leading world airline to match Dubai is looking ahead. Remember EK is Dubai and Dubai is the sheikh. The economic models that exist for the rest of the airline industry don't really count for EK, as they're not bothered by fuel prices so much and are owned by a country that, at the moment at least, has virtually unlimited recources to invest in aircraft and infrastructure. They don't have to be independently profitable as an airline at the moment, and that gives them the luxury to look far ahead to a time when that might be different, and to set themselves up for that..

IM


User currently offlineD L X From United States of America, joined May 1999, 11486 posts, RR: 52
Reply 20, posted (9 years 20 hours ago) and read 5466 times:

Quoting TinkerBelle (Reply 3):
They need the aircraft to pretty much fly anywhere in the world they please being they are almost in the middle of Asia, Europe and Africa.

So, why the need for the ultra long range aircraft? At some point on their range, the aircraft are reaching cities where the traffic to Dubai as a terminus is too low, and the opportunities for connections represent a trip the wrong way across the globe.

Let me explain with an example. Let's say EK sends a 772LR LAX-DXB. What connections would this person reasonably choose to make there? Not Austrailia, not Asia, and certainly not Europe. Basically, only Africa, a market proven to be very small from the Americas, and with plenty of competition from the European carriers.

So, even if the capacitous lift makes sense, why the extra long haul lift?



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User currently offlineStargoldLHR From Heard and McDonald Islands, joined Feb 2004, 1529 posts, RR: 1
Reply 21, posted (9 years 19 hours ago) and read 5381 times:

Isnt everyone forgetting EKs aim of setting up bases outside of the UAE ? Like Australasia / Hong Kong and even a hub in Europe eventually.


So far in 2008 45 flights and Gold already. JFK, IAD, LGA, SIN, HKG, NRT, AKL, PPT, LAX still to book ! Home Airport LCY
User currently offlineLumberton From United States of America, joined Jul 2005, 4708 posts, RR: 20
Reply 22, posted (9 years 18 hours ago) and read 5368 times:

Quoting StargoldLHR (Reply 21):
Isnt everyone forgetting EKs aim of setting up bases outside of the UAE ? Like Australasia / Hong Kong and even a hub in Europe eventually.

Doesn't seem to be a whole lot of recognition of this, huh?

I'll be interested to see what the major international carriers do to counter EK's growing influence and market power. Perhaps some big time alliances, like (and this is only an example, not a business case, OK?) QF-AA-JL. EK is going to outflank and underprice the competition. Airlines that never had to seriously compete on price internationally will suddenly discover the joys of cost cutting, governments will howl in outrage at the prospect of layoffs in good paying, glamorous occupations, and the calls for protectionism will get louder. Scary scenario? Unlikely? I invite your comments....

[Edited 2005-11-22 16:19:15]


"When all is said and done, more will be said than done".
User currently offlineDevil505x From United States of America, joined Dec 2003, 232 posts, RR: 0
Reply 23, posted (9 years 13 hours ago) and read 5219 times:

Quoting EKGOLD (Reply 1):
However it sits bang in the middle of Europe, Africa and Asia. Hence it has a possible market of in excess of 3/4 of the world population...

What market? There are also many other airlines in this region. (if thats the point I think you are getting at) Chicago and St. Louis are in the middle of the US that does not mean I want to stop there on a trip from say BOS to LAX.

Quoting B6sea (Reply 2):
And because of such a lucky location on the map, can be more thought of as ATL (in a hub sense not a geographical one) but with widebodies instead of MD-80s and 737s

But I don't think that answers the question of why they order such large aircraft. ATL certainly sees more traffic cargo and passenger than DXB. Wasn't there some skepticism when they ordered the A380?


User currently offlineStitch From United States of America, joined Jul 2005, 31234 posts, RR: 85
Reply 24, posted (9 years 11 hours ago) and read 5129 times:
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Quoting D L X (Reply 20):
Let me explain with an example. Let's say EK sends a 772LR LAX-DXB. What connections would this person reasonably choose to make there? Basically, only Africa, a market proven to be very small from the Americas, and with plenty of competition from the European carriers.

Well what about the people who origin in the US and need to visit DXB for business (or even tourism)? Having a direct option via an EK 772LR probably holds more appeal then flying US-LHR/FRA/HKG-DXB. Rumor has it that EK's 772LRs will be equipped with same luxurious cabins as their A345 fleet, so that should be an incentive for folks in premium cabins needing to get to DXB from North or South America to choose a non-stop EK 772LR vs. a European or Asian connection.


25 N60659 : Countries like Pakistan and India have large ex-pat populations on the West Coast of the US. I would think they would form a large proportion of the
26 Emirates773ER : Preciously. That includes people like me.
27 YULWinterSkies : I'm not bashing EK by saying that they pay their fuel less than their foreign concurrents -because that would be wrong-, but I have the feeling that
28 Wdleiser : Abu Dhabi is sitting on a humongous natural gas supply if I recall hearing.
29 Devil505x : I see what you are both getting at and for the most part it answers my question. However is there a great deal of speculation that this will happen?
30 EKGOLD : Not true and has been discussed to death on this forum.. Dubai has to import Jet Fuel... I said possible market.... Please dont compare the size of t
31 United Airline : I suppose Dubai has jet fuel and they can get/buy it from Abu Dhabi if they need more
32 D L X : I thought this thread was talking about all the connections to be made in DXB. My point is that the 772LR is an O/D plane. Now, I totally grant you c
33 BA : Dubai isn't a country, it is one of the 7 emirates (states) that makes up the United Arab Emirates. The emirate of Dubai does not have much oil by th
34 LPLAspotter : Agree totally. Why don't you give him your perspective on why they are purchasing such aircraft - he's asking a question, not really bashing Emirates
35 Scotron11 : You also have to factor in the tremendous increase in revenue that the Gulf region has realized from the high price of oil. Estimates of over $350Bill
36 Iwok : Who gives a *&^&*, as long as they keep buying huge amounts of heavy metal.... and their checks don't bounce. iwok
37 EKGOLD : Oil may flow out of the ground quite readily here in the UAE.... Jet Fuel does not.... Abu Dhabi imports Jet fuel as well..... since when did planes
38 HiJazzey : EKGOLD, Are you trying to tell me that ADNOC doesn't have refineries that produce Kerosene? That's hard to believe.
39 Dazeflight : He did not ask a question, he stated that EK is doing wrong. So he's the one who should be able to undermine his opinion with a few facts. Additional
40 Post contains links and images Glareskin : Back to the original question:Why Does EK Need All These High Capacity Aircraft? The answer is quite simple. In order to fill: Dubai To Become Busiest
41 Devil505x : Thank you that is the answer. Finally
42 SparkingWave : I second that. Emirates gets my vote as the sexiest airline of 2005! ~SparkingWave
43 AirxLiban : As United Airline and BA said, Dubai isn't a country and I think something like 75% of the oil in the UAE is in AUH. In addition to the UAE, there sh
44 VS772LR : Why not the A330 and A345 already in their fleet? Well anyway, my mother reads "Business Week" magazine and there was an article on DXB. Right now DX
45 A350 : It's the economy of scale! And it is that for two reasonslarge a/c offer low CASM. Remember, that's the key idea of the A380! large orders result in h
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