Devil505x From United States of America, joined Dec 2003, 232 posts, RR: 0 Posted (8 years 2 weeks 1 day 6 hours ago) and read 6281 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?
EKGOLD From Australia, joined May 2005, 207 posts, RR: 6 Reply 1, posted (8 years 2 weeks 1 day 1 hour ago) and read 6147 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.
B6sea From United States of America, joined Aug 2005, 340 posts, RR: 0 Reply 2, posted (8 years 2 weeks 1 day ago) and read 6106 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
TinkerBelle From , joined Dec 1969, posts, RR: Reply 3, posted (8 years 2 weeks 1 day ago) and read 6080 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.
Centrair From Japan, joined Jan 2005, 3597 posts, RR: 21 Reply 4, posted (8 years 2 weeks 1 day ago) and read 6019 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!
Beaucaire From Syria, joined Sep 2003, 5252 posts, RR: 25 Reply 5, posted (8 years 2 weeks 23 hours ago) and read 5981 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...
Rampart From United States of America, joined Aug 2005, 3015 posts, RR: 7 Reply 10, posted (8 years 2 weeks 17 hours ago) and read 5543 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.
Lumberton From United States of America, joined Jul 2005, 4708 posts, RR: 21 Reply 16, posted (8 years 2 weeks 10 hours ago) and read 5032 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".
MSYYZ From Canada, joined Oct 2005, 851 posts, RR: 9 Reply 18, posted (8 years 2 weeks 10 hours ago) and read 4767 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 .
IMatAMS From Netherlands, joined Feb 2005, 300 posts, RR: 0 Reply 19, posted (8 years 2 weeks 10 hours ago) and read 4722 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..
D L X From United States of America, joined May 1999, 10786 posts, RR: 52 Reply 20, posted (8 years 1 week 6 days 17 hours ago) and read 4419 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?
Lumberton From United States of America, joined Jul 2005, 4708 posts, RR: 21 Reply 22, posted (8 years 1 week 6 days 15 hours ago) and read 4321 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".
Devil505x From United States of America, joined Dec 2003, 232 posts, RR: 0 Reply 23, posted (8 years 1 week 6 days 10 hours ago) and read 4172 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?
Stitch From United States of America, joined Jul 2005, 28450 posts, RR: 84 Reply 24, posted (8 years 1 week 6 days 8 hours ago) and read 4082 times:
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