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Emirates / Etihad / Qatar: Can They All Succeed?  
User currently offlinesankaps From United States of America, joined Jan 2008, 2255 posts, RR: 2
Posted (4 years 5 months 3 weeks 2 days 2 hours ago) and read 17483 times:

I have been following the growth and ambitions of Emirates, followed by Etihad and Qatar Airways, with great interest in recent years. All have tremendous ambition and growth plans, great products, similar (it seems to me) business models. But... can they all succeed? Or is a shakeout inevitable?

Especially for Emirates and Etihad, given they are both based the UAE... what is the end game likely to be? Thoughts, anyone?

75 replies: All unread, showing first 25:
 
User currently offlinePlymSpotter From Spain, joined Jun 2004, 11668 posts, RR: 60
Reply 1, posted (4 years 5 months 3 weeks 2 days 1 hour ago) and read 17448 times:

I think if you include Gulf Air in that bunch, then they definitely can't all succeed as they hope. I believe the three you mention will continue to exist; Etihad and Qatar fighting it out for the premium pax and Emirates dominating the market for lower price full service travel in all classes. Certainly once they hit 60 A380s they are going to have a fleet wide CASM which is impossible to beat.


Dan  



...love is just a camouflage for what resembles rage again...
User currently offlineB727fan From United States of America, joined Apr 2004, 314 posts, RR: 0
Reply 2, posted (4 years 5 months 3 weeks 2 days 1 hour ago) and read 17365 times:

As long as Black Gold flows  

User currently offlineshamrock604 From Ireland, joined Sep 2007, 4192 posts, RR: 12
Reply 3, posted (4 years 5 months 3 weeks 2 days 1 hour ago) and read 17338 times:

Quoting B727fan (Reply 2):
As long as Black Gold flows

Irrelevant. Dubai has no oil left. Abu Dhabi isnt far behind. EY and EK are two well run companies who have exploited markets that other carriers ignored for too long, with strategically located hubs, and great products allied to low costs.

I guess that annoys some.  



Flown EI,FR,RE,EIR,VE,SI,TLA,BA,BE,BD,VX,MON,AF,YS,WX,KL,SK,LH,OK,OS,LX,IB,LTU,HLX,4U,SU,CO,DL,UA,AC,PR,MH,SQ,QF, EY, EK
User currently offlineRJ111 From , joined Dec 1969, posts, RR:
Reply 4, posted (4 years 5 months 3 weeks 2 days 1 hour ago) and read 17311 times:

Yes, because their hubs are perfectly located for so many markets.

User currently offlineB727fan From United States of America, joined Apr 2004, 314 posts, RR: 0
Reply 5, posted (4 years 5 months 3 weeks 2 days 1 hour ago) and read 17207 times:

Quoting shamrock604 (Reply 3):
Irrelevant. Dubai has no oil left. Abu Dhabi isnt far behind. EY and EK are two well run companies who have exploited markets that other carriers ignored for too long, with strategically located hubs, and great products allied to low costs.

I guess that annoys some.

Not really. I am in UAE now, and have both lived and worked here, as well as Qatar, KSa, Kuwait and Bahrain. First came here (Dubai) back in the 80's before the big jump start of 90's boom. One thing that many fail to realize is that the economy & infrastructure over here as well as electricity, water purification system etc. are purely dependent on fossil fuel, in this case Oil. The growth is absolutely unsustainable.
All the "bling bling" you see, is just that, for show and showing off. The Islands which you see getting built are an environmental disaster. What happened to Dubai is a prelude of what the bigger picture is going to be.
Now, EK, QR, EY etc. all seem to be doing just fine at this time, but they are also heavily subsidized by the ruling families of their region.
I am not going to mention the names of people We have met with and companies I work for, but we have had serious discussions on the past, especially with authorities in Dubai to curb the growth, because it is simply out of control and means of future sustainability. But they shrugged it off!
My dear, once the Oil runs out, many of those cities shining today will be in black outs. Even internally, a country like the UAE as an example, is facing many problems (other Emirates, local population growth, economy, jobs, manufacturing, etc.)
KSA has even more issues to deal with. Qatar has 3rd largest natural gas reserve and will be fine for a while. If I had to place a bet, Bahrain (yes, that tiny Island) would be the one who will outlast them all.
I hope to see them survive though. I hate to see it otherwise as it impact millions of lives.


User currently offlineshamrock604 From Ireland, joined Sep 2007, 4192 posts, RR: 12
Reply 6, posted (4 years 5 months 3 weeks 2 days 1 hour ago) and read 17160 times:

Quoting B727fan (Reply 5):
Not really. I am in UAE now, and have both lived and worked here, as well as Qatar, KSa, Kuwait and Bahrain. First came here (Dubai) back in the 80's before the big jump start of 90's boom. One thing that many fail to realize is that the economy & infrastructure over here as well as electricity, water purification system etc. are purely dependent on fossil fuel, in this case Oil. The growth is absolutely unsustainable.

I'm a regular in that part of the world myself, and I know what an infrastructural mess DXB in particular is becoming.

But that is pretty irrelevant to airlines where a huge part of their volume (in EK's case, we're talking 80%) is transfer business.

For EY, i'd be surprised if local O&D really figures at all. If their DUB route is anything to judge, it means very little.

If you are going to make a claim about EK/EY being oil dependent, I think you need to clearly state you are referring to DXB and AUH themselves, and not to some hidden subvention that the airlines are getting from their governments. There is too much a.net myth on this subject.



Flown EI,FR,RE,EIR,VE,SI,TLA,BA,BE,BD,VX,MON,AF,YS,WX,KL,SK,LH,OK,OS,LX,IB,LTU,HLX,4U,SU,CO,DL,UA,AC,PR,MH,SQ,QF, EY, EK
User currently offlineRJ111 From , joined Dec 1969, posts, RR:
Reply 7, posted (4 years 5 months 3 weeks 2 days 1 hour ago) and read 17120 times:

Dubai has very little oil anyway.

User currently offlineB727fan From United States of America, joined Apr 2004, 314 posts, RR: 0
Reply 8, posted (4 years 5 months 3 weeks 2 days 1 hour ago) and read 17115 times:

Quoting shamrock604 (Reply 6):
If you are going to make a claim about EK/EY being oil dependent, I think you need to clearly state you are referring to DXB and AUH themselves, and not to some hidden subvention that the airlines are getting from their governments. There is too much a.net myth on this subject.

That would indeed be interesting to see them around and growing even after the wells have dried up, the Al Nahyan, and
Al Maktoom cash reserves are running low. No pun intended, really, I mean it.


User currently offlineEmirates773ER From Pakistan, joined Jun 2005, 1450 posts, RR: 9
Reply 9, posted (4 years 5 months 3 weeks 2 days ago) and read 17010 times:

Quoting B727fan (Reply 8):
That would indeed be interesting to see them around and growing even after the wells have dried up, the Al Nahyan, and
Al Maktoom cash reserves are running low. No pun intended, really, I mean it.

What you are saying about Dubai is very well true but not so for Abu Dhabi. With a estimated oil reserve of 90 billion barrels and a cash fund valued at half a trillion it is one of the richest cities in the world and will be at least for a century.



The Truth is Out There ---- Face It!!!!!
User currently offlineEmirates773ER From Pakistan, joined Jun 2005, 1450 posts, RR: 9
Reply 10, posted (4 years 5 months 3 weeks 2 days ago) and read 17007 times:

Forgot to add my source:

http://www.energytribune.com/articles.cfm?aid=3680



The Truth is Out There ---- Face It!!!!!
User currently offlineD328 From United States of America, joined Jul 2007, 307 posts, RR: 0
Reply 11, posted (4 years 5 months 3 weeks 2 days ago) and read 16926 times:

I flew to AUH in Feb. of this year and just went around there and Dubai and from what i heard from people I got to speak with Dubai is getting whatever money they need from Abu Dhabi...Since that is where the oil is. The Flight on Etihad was amazing. I wish the American airlines here could keep up with them...But yeah, money, we want everything cheap.. Flight was only $840 r/t BOS-ORD-AUH-JFK-BOS, but coming back the blizzard hit NYC so went back to ORD then BOS. Would love to go back to the U.A.E.

User currently offlineshamrock604 From Ireland, joined Sep 2007, 4192 posts, RR: 12
Reply 12, posted (4 years 5 months 3 weeks 2 days ago) and read 16811 times:

Quoting B727fan (Reply 8):
That would indeed be interesting to see them around and growing even after the wells have dried up, the Al Nahyan, and
Al Maktoom cash reserves are running low. No pun intended, really, I mean it.

Well, if ALL the oil wells dry up, then it will be pretty interesting to see ANYONE still operating and growing...  

But seriously, EK and EY were set up with this very scenario in mind. I.e zero oil.

The aim has always been to replace Oil with tourism, services etc etc. Hence DXB and AUH plan to between them become global tourism and Business hubs. That has always been the plan, and EK and EY are a central part of spreading the message around the globe.

The UAE is doing nothing that hasnt been done before. London, Chicago, New York etc didnt become major global centres by accident. Making yourself into a global gateway for travel expands tourism and pretty much everything else, as business benefits from the connectivity. It is then self -perpetuating as the extra business generates extra traffic, and so the cycle continues.

BA did it for London, KLM for Amsterdam, SQ for Singapore and so the list goes on....

But, you absolutely cannot deny that EK and EY have an amazing knack for doing something that many airlines fail at:

Filling their planes. So long as they continue to do that, they have as much chance as any airline at suceeding. Oil or No oil. Plenty of carriers have weaned themselves off government support and are still around to tell the tale. I would like to see some evidence though, that these carriers actually do enjoy government subvention.



Flown EI,FR,RE,EIR,VE,SI,TLA,BA,BE,BD,VX,MON,AF,YS,WX,KL,SK,LH,OK,OS,LX,IB,LTU,HLX,4U,SU,CO,DL,UA,AC,PR,MH,SQ,QF, EY, EK
User currently offlineB727fan From United States of America, joined Apr 2004, 314 posts, RR: 0
Reply 13, posted (4 years 5 months 3 weeks 1 day 22 hours ago) and read 16512 times:

Quoting Emirates773ER (Reply 9):
What you are saying about Dubai is very well true but not so for Abu Dhabi. With a estimated oil reserve of 90 billion barrels and a cash fund valued at half a trillion it is one of the richest cities in the world and will be at least for a century.

Agreed. No one is disputing AD and UAE for that matter, to be one of the wealthiest worlds states. But the growth is simply tied and hinged onto a single "finite" resource, Oil. As supply runs short, population and demand grows, things are not going to be as rosy as one may think. Especially when other Emirates (Sharjah, UAQ, RAK, Ajman, Fujairah) become more and more desperate to sustain their territories.

Quoting shamrock604 (Reply 12):

Well, if ALL the oil wells dry up, then it will be pretty interesting to see ANYONE still operating and growing...

  

Quoting shamrock604 (Reply 12):
The UAE is doing nothing that hasn't been done before. London, Chicago, New York etc didn't become major global centers by accident. Making yourself into a global gateway for travel expands tourism and pretty much everything else, as business benefits from the connectivity. It is then self -perpetuating as the extra business generates extra traffic, and so the cycle continues.

Here is where you got it wrong. Lets take DUBAL for instance (Dubai Aluminum). UAE has no Bauxite, and so it must be imported, fossil fuel is used for processing etc and ultimately extraction and production Aluminum. Same goes with the Arab Steel, again the ores are imported, processing is all oil dependent. At some point, when demand was high, ways justified the means, but in long wrong, it is simply not going to work. All the Golf courses, Parks, drinking water, sewage treatment, Electrical generation are based on oil and when that runs low, guess what, everything becomes more expensive and thus hurt the living, labor, socio-economy, tourism etc. Even as they are building nuclear plans to generating electricity, they have to pay for the construction, maintenance and fuel with oil revenues!Unfortunately, many of the developments are not in par with mother nature has in mind with that region. Thats simply the fact.
Again, I certainly hope I am wrong! Having spent many years in Dubai (back in 80's) this place in a way is special to me.

[Edited 2010-05-02 18:57:41]

[Edited 2010-05-02 18:58:14]

User currently offlineshamrock604 From Ireland, joined Sep 2007, 4192 posts, RR: 12
Reply 14, posted (4 years 5 months 3 weeks 1 day 22 hours ago) and read 16449 times:

Quoting B727fan (Reply 13):
Here is where you got it wrong. Lets take DUBAL for instance (Dubai Aluminum). UAE has no Bauxite, and so it must be imported, fossil fuel is used for processing etc and ultimately extraction and production Aluminum. Same goes with the Arab Steel, again the ores are imported, processing is all oil dependent. At some point, when demand was high, ways justified the means, but in long wrong, it is simply not going to work. All the Golf courses, Parks, drinking water, sewage treatment, Electrical generation are based on oil and when that runs low, guess what, everything becomes more expensive and thus hurt the living, labor, socio-economy, tourism etc. Even as they are building nuclear plans to generating electricity, they have to pay for the construction, maintenance and fuel with oil revenues!Unfortunately, many of the developments are not in par with mother nature has in mind with that region. Thats simply the fact.
Again, I certainly hope I am wrong! Having spent many years in Dubai (back in 80's) this place in a way is special to me.

But isnt that what is going to happen everywhere if the oil runs out? It isnt unique to Dubai. Most of us have to import our needs. We will all have to fund alternative energy supply if oil runs dr, and at least they have a nice little nest egg to do that with, which is more than most of us are able to say.

I dont doubt anything you are saying about the wider Dubai economy and its unsustainability, but I think we need to seperate the airline from the wider economy. EK's model is transit, and that business is huge. Even if Dubai turns into a dump overnight, that business isnt going to go away. They have already established themselves a serious player, and DXB airport as one of the world's major connecting points.



Flown EI,FR,RE,EIR,VE,SI,TLA,BA,BE,BD,VX,MON,AF,YS,WX,KL,SK,LH,OK,OS,LX,IB,LTU,HLX,4U,SU,CO,DL,UA,AC,PR,MH,SQ,QF, EY, EK
User currently offlinehuaiwei From Singapore, joined Oct 2008, 1116 posts, RR: 2
Reply 15, posted (4 years 5 months 3 weeks 1 day 22 hours ago) and read 16414 times:

Quoting shamrock604 (Reply 14):
I dont doubt anything you are saying about the wider Dubai economy and its unsustainability, but I think we need to seperate the airline from the wider economy. EK's model is transit, and that business is huge. Even if Dubai turns into a dump overnight, that business isnt going to go away. They have already established themselves a serious player, and DXB airport as one of the world's major connecting points.

  

Anyhow, why are our dear folks here so worried about post-oil Dubai? They are already operating with a very small dependence on oil money, and heck, they can always go into massive production of solar power or become a major sand exporter to the rest of the world facing increasing risks of flooding thanks to the rising seas! 



It's huaiwei...not huawei. I have nothing to do with the PRC! :)
User currently offlineshamrock604 From Ireland, joined Sep 2007, 4192 posts, RR: 12
Reply 16, posted (4 years 5 months 3 weeks 1 day 22 hours ago) and read 16375 times:

Quoting huaiwei (Reply 15):
Anyhow, why are our dear folks here so worried about post-oil Dubai? They are already operating with a very small dependence on oil money, and heck, they can always go into massive production of solar power or become a major sand exporter to the rest of the world facing increasing risks of flooding thanks to the rising seas!

Indeed. They are hardly ever going to run short of solar power or sand, now are they  

Not disrespecting B727Fan in any way, but whenever a smaller, less important state makes a big name for itself, there is always someone to tell them how much they are f**king up, or how it isonly coming from corruption or an un-level playing field.

I bet Singapore had those accusations in the past. I know Ireland has also.... 



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User currently offlinehuaiwei From Singapore, joined Oct 2008, 1116 posts, RR: 2
Reply 17, posted (4 years 5 months 3 weeks 1 day 21 hours ago) and read 16286 times:

Quoting shamrock604 (Reply 16):

I bet Singapore had those accusations in the past. I know Ireland has also....

Heh only just a few years ago, Ireland's case has been frequently cited in Singapore as an example of an economy with 4 million people (exactly the same as Singapore's) who can beat the odds in the midst of much large countries in Europe, turn its economy around, and become a sparkling example of how to run an economy well.

When Singapore was expelled from Malaysia rather unceremoniously (I can't think of how many other countries there are out there who are independent against their will!), it was done so with the expectation that Singapore would come crawling back in a jiffy. Singapore did eventually "crawl back"...in the form of thousands of Singaporeans crawling through the jams on the causeway to Malaysia to shop every day since it is so much more cheaper there.

You can be sure the Malaysians do not have very kind words for this excrement at the bottom end of the Malay Peninsula, and till this day, many Malaysians (or rather, their most vocal leaders) insist Singapore got to where it is today by exploiting Malaysia in every possible way.

So when anyone insists SQ got to where it is today because the Singapore government owns and runs it, I merely shrug my shoulders and let others jump in to defend SQ, many of whom are not Singaporeans. And when people start to dismiss the Middle Eastern airlines and even the prospects of the territories these airlines are based in, I could barely resist the urge to join the many non-Arabs who jump in to speak up for them!

What a funny world we all live in! 



It's huaiwei...not huawei. I have nothing to do with the PRC! :)
User currently offlineshamrock604 From Ireland, joined Sep 2007, 4192 posts, RR: 12
Reply 18, posted (4 years 5 months 3 weeks 1 day 20 hours ago) and read 16084 times:

Quoting huaiwei (Reply 17):
Heh only just a few years ago, Ireland's case has been frequently cited in Singapore as an example of an economy with 4 million people (exactly the same as Singapore's) who can beat the odds in the midst of much large countries in Europe, turn its economy around, and become a sparkling example of how to run an economy well.

Dude, I just knew there was a reason I loved Singapore so much!!!  

We have taken a knock economy wise - but we're on our way back!

Quoting huaiwei (Reply 17):
You can be sure the Malaysians do not have very kind words for this excrement at the bottom end of the Malay Peninsula, and till this day, many Malaysians (or rather, their most vocal leaders) insist Singapore got to where it is today by exploiting Malaysia in every possible way.

Really? I've been to both countries, love them both, but I can hardly see how Singapore got there by cheating. It looks to me like it got where it is by expert planning and by building a reputation for quality. It something I'd like to see us Irish learn from a little better. We dont always have a reputation for quality, and we need to work on that.

Quoting huaiwei (Reply 17):
So when anyone insists SQ got to where it is today because the Singapore government owns and runs it, I merely shrug my shoulders and let others jump in to defend SQ, many of whom are not Singaporeans

So what if the Government owns SQ? Governments own lots of stuff, including airlines, and they are usually awful in terms of efficiency, service, just about everything.

Government ownership is usually a disadvantage as far as I can tell!!!!

Anyway, my point is: If you are a small country who makes it big, there is always some bastard out there to knock you. Just the way it is.....ditto Emirates. It will always be trying to shake off the illusion that it's funded by oil...



Flown EI,FR,RE,EIR,VE,SI,TLA,BA,BE,BD,VX,MON,AF,YS,WX,KL,SK,LH,OK,OS,LX,IB,LTU,HLX,4U,SU,CO,DL,UA,AC,PR,MH,SQ,QF, EY, EK
User currently offlinedirectorguy From Egypt, joined Jul 2008, 1697 posts, RR: 11
Reply 19, posted (4 years 5 months 3 weeks 1 day 16 hours ago) and read 15596 times:

Quoting B727fan (Reply 13):

Quite correct. Although Bahrain's significance has declined relative to Dubai's rise in status, I would not eliminate it if only for one reason-the population there are more willing to accomplish things. The UAE is pretty much a welfare state and because of this, true creativity and enterprise are somewhat stiffled. In Bahrain, standards of living are lower, as are incomes, so there is greater incentive to work. AD may have money for a century or whatever, but no telling what tomorrow can bring. The truth remains that the majority of Gulf nations are incapable of operating within a purely capitalist system i.e. minimal government aid.

The Emirates/GF/Qatar/Etihad thing is always an interesting debate. AFAIK, QR and EY will remain subsidised entites, so they will remain (I think EY is profitable on its own now but not so sure). GF is in the middle of a restructure program that should eventually make it profitable-with the right alliance and aircraft, it could have a vital role to play.

Now-imagine if all subsidies were removed and you have QR/EY/EK/GF being forced to compete. There is obviously too much overlap. The ULHs to Australia and North America would be the first to be restructured. There would be less 'prestige' routes like DOH-GRU-EZE and AUH-CPT. The trunk routes, like LHR, FRA, CDG, BOM, SIN, HKG would still be there though.
Now-imagine if airline subsidies are withdrawn because the governments themselves are in serious financial difficulties-this could lead to greater Gulf cooperation, along the lines of a Gulf Confederation/UAE+Bahrain+Qatar. GF would have a new role to play, as the multi-state official carrier, which it was originally designed to be.


User currently offlineQ120 From Canada, joined Aug 2008, 279 posts, RR: 0
Reply 20, posted (4 years 5 months 3 weeks 1 day 16 hours ago) and read 15296 times:

Quoting B727fan (Reply 2):
As long as Black Gold flows

I knew that was going to trigger some arguements between people, but I agree with that statement.
those who dont believe it just have one of these   



However beautiful the strategy, you should occasionally look at the results
User currently offlineMillwallSean From Singapore, joined Apr 2008, 1269 posts, RR: 6
Reply 21, posted (4 years 5 months 3 weeks 1 day 15 hours ago) and read 15152 times:

I don't see why people always have to assume that its oil this and oil that.

I mean we saw the rise of the SE Asian carriers a few decades ago. maximising their location and taking advantage of other markets providing good connections and a better product.

Now we see the gulf carriers do the same.

I am all for EK, they are profitable (yes I am also not sure how to separate the handling etc Dnata from the carrier) but they have been a breath of fresh air and revitalised the industry and one of the worlds largest accounting conmpanies consoder them profitable thats good enough for me. Kudos to them.

QR, heavy losses but still ordering like mad, not so keen on that model, think its disrupts fair play and good business (so do Chapter 11, stateaid to the likes of Alitalia in my opinion as well) personally I think having an airline that expands more and more every year despite mounting losses and that gets its money not from relatively transparent financial market but from one ruling family is rather bad for airlines being run by the books.
Not sure when enough is enough, I mean it cant be fun for airlines having to play by rules to see QR undercut them on prices and spend more on fleet and executive travellers despite them being clearly unprofitable. Disrupts competition.

EY not sure they will be that profitable but they seem to be doing things right at the moment. They have Abu Dhabi in the back and they are wealthy. Interesting to see how it plays out. they havent expanded like crazy either but followed are more sustainable path. At the moment best of the gulfcarriers to fly with in my humble opinion.

GF - basketcase financially. Should be relegated to a regional player bahrain might have been the early financial centre but the country is to small so sustain a carrier that aims globally.

The carrier I really like is Air Arabia. Different model but successful in its own niche. Good little airline.



No One Likes Us - We Dont Care.
User currently offlineHKA From Canada, joined Jan 2006, 148 posts, RR: 1
Reply 22, posted (4 years 5 months 3 weeks 1 day 14 hours ago) and read 14528 times:

the oil will last for another 50 years at least... and so will the airlines of the ME even if people say thier success is because of oil. Thier aircraft have a age of 25 years before they retire. So things are going to fine. The main success reason is because they are located right in the middle of the world, surrounded by asia, europe, africa NA and they are taking advantage of it. But Kuwait Airways and Saudi missed this opportunity.

User currently offlineaffirmative From France, joined Jul 2009, 352 posts, RR: 0
Reply 23, posted (4 years 5 months 3 weeks 1 day 12 hours ago) and read 13289 times:

Quoting B727fan (Reply 13):
But the growth is simply tied and hinged onto a single "finite" resource, Oil.

Knowing what you seem, or say, you know you should the also know that a big focus for the UAE government right now is to step away from being dependent on oil and gas. One first step is the building of nuclear powerplants outside Abu Dhabi as well as looking in to solar and wind power.

Secondly the main focus in Abu Dhabi and to a lesser extent Dubai in terms of investment is sustainability. My wife works with different investment companies in this region and the one word they keep mentioning these days is "sustainability" and this means everything from infrastructure to industrial. There's also a big focus on educating the Emirati population to help them grow with the country.

And, Dubai has oil. Not a lot but enough to pay for civil services (police, firefighting and such). And they recently discovered a new well that are about to be explored, estimated to generate about 500.000 to a million dollars per day. Not easy to find info but Wiki has a few lines: http://en.wikipedia.org/wiki/Al-Jalila_Field

A lot of people I have talked to about this region doesn't like it. For me I find that strange why someone would want to live and work in a place they don't agree with and even despises..

And English guy once said to me: "You arrive in Dubai with two buckets, you fill one with sh*t and one with money and you leave as soon as one of them is full".. I don't agree, but it is a common view..

---

As for EY, EK and QR..

My view is that EK and EY will survive. EK because it actually generates money, EY because it will take a looooong time to deplete Abu Dhabis funds even for an airline (I heard that they have close to 900 billion USD in total investment funds between the big investment companies; Aldar, Mubadala et al..). And eventually they might actually be profitable.

QR will be in trouble I think. Mind you that Qatar has pretty much the same liquidity as Abu Dhabi but I'm not sure about their business model. And I hear that a lot of people are looking elsewhere for business travel as well as jobs.. But I guess that could also just be the EK/EY rumor mill..

But, above all, I think time will tell in the end..  



I love the smell of Jet-A1 in the morning...
User currently offlineJacobin777 From United States of America, joined Sep 2004, 14968 posts, RR: 60
Reply 24, posted (4 years 5 months 3 weeks 1 day 12 hours ago) and read 12796 times:

Quoting directorguy (Reply 19):
(I think EY is profitable on its own now but not so sure).

EY isn't profitable yet but should be soon.

Quoting directorguy (Reply 19):
GF is in the middle of a restructure program that should eventually make it profitable-with the right alliance and aircraft,

  . They have taken steps as they have a 24 B788's on order. They have extensive codesharing with AA and other carrier. I wouldn't be surprised if they join OneWorld eventually.

Quoting MillwallSean (Reply 21):
QR, heavy losses but still ordering like mad, not so keen on that model, think its disrupts fair play and good business (so do Chapter 11, stateaid

I agree with you on the most part except for the "Chapter 11 bit".....Chapter 11 isn't government subsidy. Its all done via the private sector. In other words, the bonds, debt, etc. is done with private creditors and shareholders taking the "hit". Besides the GM (Government Motors) and AIG case where the government stepped in (and to which I was completely opposed to), Chapter 11 doesn't involve the government at all.



"Up the Irons!"
25 einsteinboricua : I wouldn't be surprised that if both EK and EY run into trouble, they merge sort of like AF-KL and BA-IB. However, to united all Gulf carriers under a
26 B727fan : Certainly hope that will be the focus from now onwards. But please, you can fact check my claims with experts in the fields of design and constructio
27 AABB777 : Wonder what the "new" United means for QR and EK... CO with its EK codeshare, and UA with the QR codeshare...
28 directorguy : But unlike most carriers that get/used to get state-aid, QR is miles ahead. They deliver a consistently solid product and convenient timings. Alitali
29 Post contains images SQ_EK_freak : Yeah GF will most likely be relegated to a smaller full service regional carrier in my opinion, focusing on point to point traffic within the Middle
30 hohd : CO/United may codeshare with EK and/or QR. But it will cannibalize pax on United own flight from IAD to DXB (although very few from Houston would conn
31 Post contains links and images ojas : And how do you know? given your biased opinion about QR ... I knew that was coming. See one must realise that all the above mentioned airlines will b
32 Post contains links tarunkashyap14 : dude, its not 90 billion barrels, its just 4 billion barrels...don't exaggerate the things courtesy-- http://www.earthtimes.org/articles/s...ould-sta
33 Post contains images SQ_EK_freak : Haha I admit that I am a bit biased against QR - take it as me working for a competing airline and seeing them as a threat... J/K - but the only reas
34 ojas : That's the thing, we just stick to one statement and conclude things that suit to us. Al Baker has expressed in several press releases that they expe
35 Post contains images SQ_EK_freak : Well there you have it Well, can't say that QR per se motivates me, but a host of other reasons
36 Emirates773ER : I suggest you go read my source and your source carefully once again.
37 Fly2CHC : QF/NZ/DJ SQ/MH/TG ET/KQ BA/VS/LH/AF Can they all survive? Sorry, I don't see the relevance of this thread.
38 DavidByrne : I've seen many suggestions over the years that the Gulf carriers are heavily subsidised, and a few total denials that this is the case. What I've neve
39 Viscount724 : Just being based in countries where there are no corporate or personal income taxes can be seen as a subsiidy. Virtually all other major airlines, an
40 sankaps : In most of the cases mentioned above, there is a reasonable to sizeable domestic market to support the home airline. Only exception in your list abov
41 777way : I would like to have EY/EK merge with EK brand retained.
42 lightsaber : Nothing stopping their governments from offering tax rebates to all airlines based in their home country (or a certain metropolitan area). The mid-ea
43 DavidByrne : I disagree that this constitutes a subsidy. If you go down that route, then you could claim that airlines that operate in a jurisdiction where there
44 Post contains links huaiwei : So in your view, Singapore has no home market, despite - having a population size of 4,839,400 in 2008, which is bigger than or equal to countries li
45 sankaps : I said "have small home markets", not "no home market". A home market population of 4M is small, and ceetainly on its own cannot support an airline t
46 Post contains images huaiwei : Oh really? I have two questions for you. 1. You singled out SIN and SQ in that list. Assuming you were referring to "small home markets", care to sha
47 Viscount724 : I think "small home market" in the post you quote was referring to the population of the country, not the city. You include AMS as a smaller city tha
48 Viscount724 : My point was that a carrier based in a country without taxes has a big competitive advantage since their entire gross profit can be reinvested in new
49 SQ_EK_freak : And have no union representation.
50 HiJazzey : The tax regime argument doesn't wash. Airline employees in the west enjoy untaxed income such as per-diems and other allowances, and unlike the tax fr
51 DavidByrne : Don't disagree with any of this. I just think it's mischievous to label it a "subsidy", since "subsidy" is such a loaded and politically-emotive term
52 Post contains images sankaps : Precisely. Huawei, my comments are not meant to be a criticism of Singapore, quite the opposite, so relax . It is amazing what Singapore has managed
53 Post contains images huaiwei : And it entirely makes no sense to assume that an airline serves strictly based on national borders too. What makes you think that just because someon
54 Post contains images astuteman : No they won't. By then these states will have invested in one of the biggest nuclear power generation programmes that the world is likely to see, usi
55 413X3 : The difference is those Asian markets had something sustainable to sell, high tech labor. The Middle East has oil. And all investment is coming from
56 sankaps : I think you are still missing the point. An airline has a natural catchment, which is usually defined as the country and geographical region it is ba
57 Post contains images ojas : It is not complicated either. de facto carrier of India? what are you saying? SQ just had BOM, DEL,CCU, MAA till 2001 or so and then it expanded to c
58 Post contains images Jacobin777 : Dubai is the same as Singapore and therefore EK is the same as SQ... Different markets, different models between the two. Also, the ME countries are
59 Tayaramecanici : Airlines are dependent on traffic rights to their various destinations. These are acquired thru various means bilateral trade being one and in the ins
60 Jacobin777 : Yet FlyDubai still expands regardless. DXB's "huge labour market" however doesn't fly KHI/LHE/DEL/BOM-DXB-YYZ/LAX/SFO nor does it fly AKL/SYD/BNE/MEL
61 sankaps : SQ connects more Indian cities more effectively to its global network than Air India did before the so-called merger with IC, and than 9W, KF, etc do
62 ojas : Other than AMD, AI has flights out of all those stations where SQ operate. BLR, DEL, BOM, MAA, CCU. Secondly 9W code shares with QF and thus you can
63 413X3 : Could have fooled me, have you seen their literacy rates?
64 Jacobin777 : Yes, have you? Source: https://www.cia.gov/library/publications/the-world-factbook -------------- Bahrain: Literacy: Field info displayed for all cou
65 413X3 : For such wealth, their rates are extremely low.
66 DavidByrne : I think that this sort of wild, unsubstantiated speculation seriously lowers the quality of A-net as a forum. If you have evidence to support this, t
67 sankaps : So you maintain that AI's connectivity from, say, a CCU or BLR or HYD or MAA to Australia, China, or Japan is competitive to SQ? Though it involves b
68 Jacobin777 : "Extremely low"? You have got to be kidding me....Besides the Iraq female outlier, rest are 70's, 80's and 90's% range. "Extremely low" is : --------
69 surfandsnow : Actually, given the Persian Gulf state's longstanding political stability and great wealth, those rates are (for the most part) indeed quite low. Jus
70 Jacobin777 : ....while our discussion has gone off on a tangent to literacy rates and traveling, they aren't necessarily tied. Some of the higher literacy rated c
71 413X3 : The topic was comparing them to thriving 1st world nations, not war torn 3rd world countries.
72 ojas : From, MAA, CCU, BLR definitely yes. But there is no point in you refuting in saying In reply 61 you did not say "on Indian carriers". That is the Gov
73 sankaps : That is exactly the point. All of India's carriers together offer less than SQ and its affiliates alone do. Which is what makes SQ the 900 lb gorilla
74 tayaramecanici : Undoubtedly the real money comes from the PAX flying long haul from India via DXB. However to feed them (ULH/LH) into DXB, the flt originating out of
75 Post contains images Jacobin777 : I'm not so sure I get your point.. Those are just the Indo-Pak pax you mentioned...what about all the other non-minimum wage-earners? I've been flyin
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