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Emirates Will Slash A380 Fares  
User currently offlineEK156 From United Arab Emirates, joined May 2005, 765 posts, RR: 3
Posted (3 years 5 months 3 weeks 2 days 19 hours ago) and read 18322 times:

Well it seems the novelty factor is over! Time to pack those A380s and pass on the cost benefits! With 90 A380s on the way, I wonder if Emirates will change the pricing game again


http://www.arabianbusiness.com/emira...slash-fares-fill-a380s-408027.html

23 replies: All unread, jump to last
 
User currently onlinefcogafa From United Kingdom, joined May 2008, 884 posts, RR: 0
Reply 1, posted (3 years 5 months 3 weeks 2 days 19 hours ago) and read 18273 times:

Reading between the lines, is this an admission of overcapacity already, with only a fifth of their A380s delivered? If they can't fill flights on the current 'major' routes, how is it going to work when they have to start putting them on lesser routes? It is regularly said that profits are made in the upper classes, not by filling economy at a discount.


May be damp seat time in the Airbus board room!

[Edited 2011-07-02 04:17:25]

User currently offlineeaa3 From United States of America, joined Sep 2007, 1033 posts, RR: 0
Reply 2, posted (3 years 5 months 3 weeks 2 days 18 hours ago) and read 17994 times:

Given that their fares are rather high and they seem to almost never be the lowest on the routes that I have flown this may simply be that Emirates fares are to high. They thought that they could, given their great product, push fares up. But as it turns out their is lot's of competition on their routes and therefore not room for such high fares.

I doubt that this is a fundamental problem for Emirates. The markets they serve are growing fast. However competition will always push down fares. Airlines can really only increase fares if their is little competition.


User currently offlineaerorobnz From Rwanda, joined Feb 2001, 7393 posts, RR: 16
Reply 3, posted (3 years 5 months 3 weeks 2 days 18 hours ago) and read 17918 times:

They already undercut everyone including JQ transtasman to SYD with the A380. It's good for most of us. Cheap fares without having to subject yourself to LCC standards and non-interlineable bags.

Once MEL & BNE to AKL are also A380s I expect the same on those routes too..


User currently offlinemdword1959 From , joined Dec 1969, posts, RR:
Reply 4, posted (3 years 5 months 3 weeks 2 days 18 hours ago) and read 17919 times:

Quoting fcogafa (Reply 1):
how is it going to work when they have to start putting them on lesser routes?

We're about to find out as the next tranche of A380 deliveries to EK commences this Fall.

[Edited 2011-07-02 05:00:51]

User currently offlinecedarjet From United Kingdom, joined May 1999, 8195 posts, RR: 54
Reply 5, posted (3 years 5 months 3 weeks 2 days 18 hours ago) and read 17840 times:

I rarely find EK to be the cheapest. On the Kangaroo route, it's usually Thai, Malaysia, Qatar. With the unbeatable CASM of the A380, I would say EK are doing fine. They are a profitable company, no matter what the envious critics say.

Can't wait to fly on an Emirates A380!



fly Saha Air 707s daily from Tehran's downtown Mehrabad to Mashhad, Kish Island and Ahwaz
User currently offlinePe@rson From United Kingdom, joined Jan 2001, 19259 posts, RR: 52
Reply 6, posted (3 years 5 months 3 weeks 2 days 18 hours ago) and read 17817 times:

I have flown on 2 AF 380s and thoroughly enjoyed them.

At some point, I must fly EK LHR-DXB-BKK-HKG-BKK-DXB-LHR - all on 380s!



"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
User currently offlinedirectorguy From Egypt, joined Jul 2008, 1708 posts, RR: 11
Reply 7, posted (3 years 5 months 3 weeks 2 days 18 hours ago) and read 17752 times:

EK's yield management is pretty complex. Expensive fares to/from DXB, with 1-stop fares ranging from moderate to expensive. Great though that they're slashing fares-this means that more people will be inclined to travel EK. Many people will complain that EK is undercutting/harming the legacy carriers but the secret to everybody wanting to fly EK hasn't been low, low fares, but mainly the convenient 1-stop options coupled with reasonable fares.

User currently offlinegemuser From Australia, joined Nov 2003, 5821 posts, RR: 6
Reply 8, posted (3 years 5 months 3 weeks 2 days 18 hours ago) and read 17627 times:

Quoting aerorobnz (Reply 3):
They already undercut everyone including JQ transtasman to SYD with the A380. It's good for most of us.

While true this is hardly an indication of fare levels generally. Trans Tasman is a fifth freedom tag on, rarely the best preforming routes from a yield point of view. From SYD on the Kangaroo route I agree with Cedarjet.

Gemuser



DC23468910;B72172273373G73873H74374475275376377L77W;A319 320321332333343;BAe146;C402;DHC6;F27;L188;MD80MD85
User currently offlineaviator23 From Pakistan, joined Jan 2010, 24 posts, RR: 0
Reply 9, posted (3 years 5 months 3 weeks 2 days 11 hours ago) and read 12889 times:

I think this price slash is already in effect! I am set to fly EK 201/202 (380) JFK-DXB-JFK in July/Aug and even during this peak season I got a very reasonable deal on EK (infact the cheapest deal).However, I donot believe EK are having trouble filling up those big buses(in case of JFK for instance they could easily reduce frequency from 2 daily to 1 daily) its likely an effort to maintain the competitive edge

User currently offlineSemaex From Germany, joined Nov 2009, 833 posts, RR: 2
Reply 10, posted (3 years 5 months 3 weeks 2 days 10 hours ago) and read 12566 times:

Quoting aviator23 (Reply 9):
However, I donot believe EK are having trouble filling up those big buses(in case of JFK for instance they could easily reduce frequency from 2 daily to 1 daily) its likely an effort to maintain the competitive edge

So why should they go from 2xD to 1xD if loads are good (which I cannot judge)?

With another ~60 A380 on order, I wonder where they are going to fly those jets. Some new destinations, yes. Some already A380-served destinations as an additional flight, yes. But just how much money will they make if they want to increase loads by reducing fares? It's a game with a number of unknown variables, which might just end up going wrong.

No, I don't think EK is that stupid. Personally, I read this Tim Clark interview as another free advertising through mainstream papers. "Look, our A380 aren't full, so we're going to reduce ticket prices to fill them up. (So come on and book some free seats now!)"

I'd be mightily surprised if fares really go down significantly throughout the whole EK-380 spectrum. However, I'd be glad to be proven otherwise.



// You know you're an aviation enthusiast when you look at your neighbour's cars and think about fleet commonality.
User currently offlinehohd From United States of America, joined May 2008, 454 posts, RR: 0
Reply 11, posted (3 years 5 months 3 weeks 2 days 10 hours ago) and read 12317 times:

EK's fares has gone up and they are no longer the cheapest. Often they are the most expensive. However, EK drops fares in the last 2 to 4 weeks before the travel date and sometimes the next day fare is cheaper than a fare purchased over 2 months. That happened to me, I purchase a ticket 2 months ago to India from IAH and now the fare has dropped by more than $200. They sell the last minute tickets same or cheaper than tickets bought many months ago, unless the flight is full.

User currently offlineflylku From United States of America, joined Apr 2006, 829 posts, RR: 0
Reply 12, posted (3 years 5 months 3 weeks 2 days 9 hours ago) and read 10867 times:

Lowering prices is, in general, a strategy intended to take market share away from competitors. In some cases it will also spur new demand. There is a point however, where not matter how low prices go, there is simply not enough demand to satisfy capacity. I read into this that they (EK) are comfortable that there is sufficient demand on the routes they fly and that they are ready to start increasing market share.

Many people fail to realize that price is not the only strategy. In the airline business there are other factors that can be employed to respond to the low price competitor such as service, frequency, loyalty programs, alliances, and route structures to name a few. It will be interesting to see how the competition responds.

Remember, in business it as about profitability, not just revenue. The world is full of large low price firms that lose money and fail. In turn, it is full of savvy smaller firms who differentiate themselves on factors other than price and command a small -- and sometimes large -- premium by doing so.



...are we there yet?
User currently offlinealasdair1982 From UK - Scotland, joined Mar 2008, 468 posts, RR: 0
Reply 13, posted (3 years 5 months 3 weeks 2 days 8 hours ago) and read 10623 times:

Quoting eaa3 (Reply 2):
Given that their fares are rather high and they seem to almost never be the lowest on the routes that I have flown this may simply be that Emirates fares are to high. They thought that they could, given their great product, push fares up. But as it turns out their is lot's of competition on their routes and therefore not room for such high fares.

The fare for GLA - DXB - KUL for the dates I wanted to travel in November had been sitting at £614 for weeks until yesterday when all fares for that week shot up to £749. This morning, it had plummeted to £589. Needless to say, I snapped that up!

Compare that to MH from LHR - KUL alone, they are priced at £866 for the same period.

[Edited 2011-07-02 14:36:42]

[Edited 2011-07-02 14:46:25]

User currently offlineAFGMEL From Australia, joined Jul 2007, 747 posts, RR: 0
Reply 14, posted (3 years 5 months 3 weeks 2 days 8 hours ago) and read 10447 times:

Quoting cedarjet (Reply 5):
I rarely find EK to be the cheapest.

Particularly on the kangaroo route. I would fly them, but they are too expensive.



B 727-44/200 732/3/4/8/9 767-3 742/3/4, 772/3, A319/20/21 332/333 342/3 , DC3/4/10, F28/50/100, ATR72
User currently offlineNZ767 From New Zealand, joined Nov 2001, 1620 posts, RR: 1
Reply 15, posted (3 years 5 months 3 weeks 2 days 8 hours ago) and read 10389 times:

Quoting aerorobnz (Reply 3):
Once MEL & BNE to AKL are also A380s I expect the same on those routes too..

Is this going to happen? I hope so. I travel AKLMEL often so would be nice to try the A380 instead of the 777 without having to go through SYD.  


User currently offlineaerokiwi From New Zealand, joined Jul 2000, 2745 posts, RR: 4
Reply 16, posted (3 years 5 months 3 weeks 2 days 7 hours ago) and read 9617 times:

The article is a little ambiguous. Fares are coming down apparently, but will there still be a premium for the A380 over the rest of the fleet? I read it as probably not, meaning the fare premium charged for A380 flights didn't wash with pax.

But the reaction here seems to be that this is all part of the plan, nothing to see here, move along folks.


User currently offlineesdex From Australia, joined Jan 2011, 53 posts, RR: 0
Reply 17, posted (3 years 5 months 3 weeks 2 days 6 hours ago) and read 8845 times:

Speaking of fare competitiveness, it never ceases to amaze me how inattentive airlines can be with their online booking engines. I just did a quick test of an economy SYD>CDG>SYD round trip for 4 May 2012 outbound, 31 May 2012 outbound with the majors - esp checking EK and SQ (EK beat SQ by $600AUD with a fare of $2089 return - only difference in equipment is EK using a 773 from CDG > DXB, otherwise all A388). Cathay's booking engine meanwhile is spitting out $11,000AUD return... Way to go CK.

User currently offlineBabybus From , joined Dec 1969, posts, RR:
Reply 18, posted (3 years 5 months 3 weeks 2 days 6 hours ago) and read 8437 times:

Surely EK being able to lower fares to fill those A380s should send shock waves through the airline industry when you think how many seats EK have to sell and how few passengers there will be left to travel with anyone else.

All airlines are finding it hard to fill seats no matter what aircraft they operate.

Maybe that's the secret of the A380. You can sell seats cheaply and still make good profits.


User currently offlinegoblin211 From United States of America, joined Jun 2010, 1209 posts, RR: 0
Reply 19, posted (3 years 5 months 3 weeks 2 days 6 hours ago) and read 8311 times:

90 just seems like waaaaaaay too much for some 380s. Do other airlines have 90 of any a/c or more? It just seems too much.


From the airport with love
User currently onlinenethkt From Thailand, joined Apr 2001, 1093 posts, RR: 3
Reply 20, posted (3 years 5 months 3 weeks 2 days 5 hours ago) and read 7846 times:

During the past few years, Emirates' fare out of BKK to Europe has gone up rapidly.
EK used to be the airlines for cheap flights to Europe for Bangkok market for almost 10 years.

At the moment, EK fares are as high as THAI (of course it's THAI hub here, they can sell high price tickets) and other European legacies plus SQ.

The common names for cheap air fare to Europe for BKK has shifted from EK to Etihad, Qatar, Oman, Gulf, Kuwait, Royal Jordanian, Egypt Air etc.

If not other market that was affected by the increased price of EK, BKK is definitely one.



Let's just blame it on yields.
User currently offlineQuokka From , joined Dec 1969, posts, RR:
Reply 21, posted (3 years 5 months 3 weeks 2 days 3 hours ago) and read 6703 times:

Quoting Babybus (Reply 18):
Surely EK being able to lower fares to fill those A380s should send shock waves through the airline industry when you think how many seats EK have to sell and how few passengers there will be left to travel with anyone else.

Airlines that are unable to adapt may well suffer some loss of passengers, but the total number of passenger numbers is expected to grow by more than EK's increase in capacity. This means that there is still plenty of room for flexible airline managers to increase their business. While EK wants to increase market share on some routes on others it can increase passenger numbers while maintaining its current market share as the market itself grows.

Remember too that not all aircraft on order reflect a growth in fleet size: some will replace aircraft to be retired - around 68 (?) older 332s, 343s and 777s.

One thing that I would ask, how high are the loadings in the premium cabins? The general belief appears that it is in the premium cabins that the profit is to be made. My own experience (from an admitted small sample) is that loadings are highly variable: on some flights the F cabin has been full, on some barely 50% and on others I have been the only passenger in F.If the premium cabins aren't full, EK will have to fill more of the economy cabin to make up some of that loss.


User currently offlinewarren747sp From United States of America, joined Feb 2004, 1172 posts, RR: 0
Reply 22, posted (3 years 5 months 3 weeks 2 days 3 hours ago) and read 6687 times:

Definitely in business class considering how their product is substandard comparing to their competitors.


747SP
User currently offlinelightsaber From United States of America, joined Jan 2005, 13536 posts, RR: 100
Reply 23, posted (3 years 5 months 3 weeks 2 days 1 hour ago) and read 5868 times:
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I suspect this is a mask to start a 'fare war' on certain routes. For example, CDG to transit points.
The A380 has a 14% lower CASM than the 77W. Time to start using that to EK's advantage.   

However, doing quick searches on random February 2012 and April 2012 flight dates from Europe or LAX to a variety of EK destinations, I noticed something: China Southern, China Airlines, Royal Jordanian, Qatar, Air India, and to a lesser extend Ethad are offering some ridiculously low fares to destinations. Also, from FRA and LHR, LH and BA are being very aggressive in their fares.

Does EK really have any choice? I always thought the A380 would be an excellent trunk route 'hub stuffer.' It looks like EK will have to use it in that role.

Question: Will EK change the seating configuration? In particular I believe the current A388s have too many premium seats for most markets. Sure FRA, LHR, SYD, MEL and a few others will fill premium seats and perhaps there is an advantage sending the seats to other markets... Other markets should see more Y seats IMHO.

Quoting EK156 (Thread starter):

Well it seems the novelty factor is over!

Not among my coworkers. With low fares and A380s, EK will fill planes.

Quoting eaa3 (Reply 2):

Given that their fares are rather high and they seem to almost never be the lowest on the routes that I have flown this may simply be that Emirates fares are to high.

I know that LAX to the mid-east EK often looses sales due to their fares often are 20% higher than the competition.
Now LAX isn't an EK A380 city, but I could hope!  

For example, in February a LAX-HYD trip (I might be going) is $1,644 in coach on EK but only $917 on BA. There is no way EK is gaining that business if it is on the fare (note: EK is far less than anyone else for a 1-stop).

Quoting Babybus (Reply 18):
Maybe that's the secret of the A380. You can sell seats cheaply and still make good profits.

Translation, a lower CASM allows one to still make a profit on a lower RASM.

Quoting aerorobnz (Reply 3):
Once MEL & BNE to AKL are also A380s I expect the same on those routes too..

MEL is a given. AKL? Certainly. The question is via which cities? BNE? That I doubt. The A380s will be far more useful elsewhere for a decade.

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
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