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Emirates - Debunking Myths Over Subsidies  
User currently offlineSInGAPORE_AIR From United Kingdom, joined Nov 2000, 13745 posts, RR: 19
Posted (2 years 7 months 3 weeks 4 days 22 hours ago) and read 19809 times:

I was sent this document today which has been prepared by Emirates:

Airlines and Subsidy: Our Position

The document appears to be well-researched and some key highlights (it is definitely worth reading in full) are:

  • Examples of recent airline subsidies including AI, JL, JK, CY, OK, AZ and MA

  • Rebuttals to quotes from: AC, Association of European Airlines, AF KLM, OS, LH, Australia Workers' Union and Athena Aviation

  • A timeline of some notable airline state support events including: EI, AF, AZ, BA, IB, LH, OA, QF, TP and LX

  • Supporting quote from their auditors PwC

  • Accusing Star Alliance member airlines of taking subsidies totalling €6.8bn, of which LH Group comprises €3.125bn

  • Explanation of Emirates' sourcing of finance (US$26bn over the last 15 years)

  • A comparison of airline costs and airport costs

  • An explanation of Emirates' oil procurement including quotes from Chevron, BP and Shell





  • The compelling document will make uncomfortable reading for those that insist that Emirates is subsidised. Further, it shows that some of the most vocal airlines who claims such as these are the ones who have themselves received financial and aeropolitical subsidies.

    Subsidies aside, the graphic showing unit cost comparison just shows how competitive Emirates is.

    I think it's a very well-researched document that deals in facts rather than hyperbole.


    Anyone can fly, only the best Soar.
    173 replies: All unread, showing first 25:
     
    User currently offlineRyanairGuru From Australia, joined Oct 2006, 5939 posts, RR: 5
    Reply 1, posted (2 years 7 months 3 weeks 4 days 21 hours ago) and read 19844 times:

    I think you should sell tickets to watch this thread   this is going to be fun....


    Personally I agree with your sentiment. The report makes for fascinating reading.

    A couple of points:

    1) EK's labour costs are higher than SQ and MH.

    2) EK has 46% market share in DXB. That means that 54% of passengers are flying other carriers, putting to bed any claims that DXB's market is "totally artificial" with limited O&D and survives on connections.

    3) EK's fuel costs are pretty much average. Incidentally on this point, I've never understood those who purport that EK receives subsidised oil because even if they did get it in DXB, how do they get free oil in SYD?

    4) Some of the vitriol posted by other groups (lead by Air Canada) is unbelievable. Honestly, I have no idea why EK have never sued for libel given that some of their competitors allegations (which they make with no evidence in hand) are pretty damning. Incidentally some of the people should just have kept quiet. For example, I can't figure out why the Australian Workers Union chimed in. The only work group at QF which AWU represents are the engineers and they should be much more concerned by the fact that QF can perform their functions for less in Asia than the extent of competition (fair or otherwise) which QF is faced with on flights to Europe.


    Just my 2c. I know others will disagree.



    Worked Hard, Flew Right
    User currently offlinegkirk From UK - Scotland, joined Jun 2000, 24964 posts, RR: 56
    Reply 2, posted (2 years 7 months 3 weeks 4 days 21 hours ago) and read 19778 times:

    This should be fun to watch  


    When you hear the noise of the Tartan Army Boys, we'll be coming down the road!
    User currently offlineboeing773W From South Africa, joined Mar 2012, 47 posts, RR: 0
    Reply 3, posted (2 years 7 months 3 weeks 4 days 21 hours ago) and read 19763 times:

    Quoting SInGAPORE_AIR (Thread starter):
    I think it's a very well-researched document that deals in facts rather than hyperbole.

    It was prepared by Emirates. What else did you expect them to say?!?

    They've engaged in a campaign of trying to portray other airlines in a bad light for receiving various funds/bailouts, which according to EK amount to subsidies. Are and are they trying to use that as an excuse for something?!?

    Also, with respect, but a quote "from their auditors PWC" means nothing. Of course their own auditors will confirm EK's story. An auditor's report is effectively an opinion and nothing more. Most aren't worth the paper they're written on frankly (think back to Arthur Andersen's "audits" of Enron and you get the picture).

    This whole thing from EK reminds me a bit of the old saying 'Do as I say, not as I do'.

    [Edited 2012-04-28 01:56:23]

    User currently offlinemdavies06 From United Kingdom, joined Aug 2009, 387 posts, RR: 0
    Reply 4, posted (2 years 7 months 3 weeks 4 days 21 hours ago) and read 19658 times:

    Quote:

    Mr Spinetta describes the Gulf region in broad
    terms that distort reality. Dubai has none of
    the oil wealth of its neighbours, which is why
    it pioneered service-based companies such as
    Emirates. As a result, Emirates is unique in the
    Middle East for having consistently produced
    profits due to our strong commercial mandate.
    We have been run in this way since October
    1985. There is nothing secondary about
    profitability for Emirates, which taps international
    lenders for its financing needs and thus needs to
    operate on a profitable basis in order to service
    these loans.

    Dubai as a emirate could not afford its expansion without Abu Dhabi. I did not see this mentioned at all in this document. Its benefit from its oil neighbor is very broadbased across its entire economy.

    DXB and EK would not have had their successes without the Abu Dhabi subsidy. They are very interlinked in my view. Without the bailout in 2009-2010 Dubai as a emirate would have had to seek help from the IMF. I would love to see how this all benefitted EK but sadly this document did not mention it. Obviously a scenario which would have played out was for the Dubai emirate to sell its state assets including EK but as it was eventually bailed out this scenario did not happen.

    Without the bailout the cost base would have gone up by means of higher land acquisition cost, higher airport charges, overall increase in tax level across the society which feed through as higher operational cost, a decrease in city infrustructure investment in all levels.

    The issue of tax was a one pager, page 25, with very little statistics...the villa looks nice though as crew housing.

    The document's conclusion in page 27 is almost unreadable in light of the above.

    [Edited 2012-04-28 02:25:25]

    User currently onlinePanHAM From Germany, joined May 2005, 9739 posts, RR: 31
    Reply 5, posted (2 years 7 months 3 weeks 4 days 21 hours ago) and read 19577 times:

    A subsidy is only a subsidy when it is used to support current operations or to keep a defunct company alive.

    I just take 2 items - the € 800 Million Lufthansa pension fund - LH was government owned and had a public service pension scheme vs. the regular pension scheme in which private companies pay onthly as do the employees.

    Going public means that the privatized company cannot assume the liabilities of the old company, otherwise the IPO would not have been accepted. The pension fund is a liability of the previous owner, not the new company.,

    AUA - besides the fact that LH has assumed some old debt of AUA, who in his right mind would take over the liabilities of a defunct company? That is the previous owners liability and if the bride is so ugly that she can be married only with a solid dowry. The alternative would have been bancruptcy and a clean sheet company, like Swissair / Swiss.

    That would have been much more expensive for the Austrian state.


    True, many countries subsidize airlines, India is a good, better, a bad example. However, this pamphlet is biased and the bottom line is what the airline wanted to read.



    Es saugt und blaest der Heinzelmann wo Mutti sonst nur blasen kann. Frueher war mehr Lametta.
    User currently offlineAeroWesty From United States of America, joined Oct 2004, 20822 posts, RR: 62
    Reply 6, posted (2 years 7 months 3 weeks 4 days 21 hours ago) and read 19550 times:

    Interesting reading. On page 4, they state: "Emirates acknowledges that some airlines in the Middle East are indeed government subsidised ... " Other than a passing reference to Saudi Arabian later in the document, they don't list which ME carriers are benefitting from these subsidies, nor the amounts, while at the same time they go to great lengths to detail what they believe to be gov't subsidies for airlines outside of the region.

    It would be interesting to see the figures for subsidies given to their neighboring competitors in the same detail.



    International Homo of Mystery
    User currently offlinerogercamel From Singapore, joined Feb 2012, 88 posts, RR: 0
    Reply 7, posted (2 years 7 months 3 weeks 4 days 21 hours ago) and read 19528 times:

    Quoting SInGAPORE_AIR (Thread starter):
    I was sent this document today which has been prepared by Emirates:

    You can tailor virtually any set of statistics to meet your own aims.

    IMHO EK may not receive subsidies in the same way that state airlines have in the past. But - the business environment they find themselves in is probably favourable compared to other airlines, particularly those in the west. I doubt they have the same union issues that US and European carriers do enabling them to react quicker, and be more flexible and re-shapre their business to suit the economics.

    I'd be interested to know how EK has funded its expansion. Has it been through raising debt funding? From equity investors?


    User currently offlineZkpilot From New Zealand, joined Mar 2006, 4865 posts, RR: 10
    Reply 8, posted (2 years 7 months 3 weeks 4 days 20 hours ago) and read 19465 times:

    I love it how they compare historical subsidies... ie from back in the day when all airlines were pretty much subsidized so it was to be expected and when air routes weren't liberalized to the extent they are now. Emirates didn't even exist when most of these were done so I don't see why they are using them as comparisons.

    They bat away the argument about no tax as saying its a sovereign issue. It is a sovereign issue, but it is the single biggest factor that lowers their overall costs compared to other airlines (hundreds of millions of $ per annum), also factor in aircraft depreciation rates and it is worse still. But it could be argued that it is up to countries to decide what is best for them, in that case other countries should probably impose tariff fares on the likes of EK etc to operate out of their countries. Another option would be for other countries to allow their airlines tax free status themselves. Of course this just opens a big can of worms. If such a thing were to occur then likely fuel tax on jet fuel would need to be imposed at high levels (something which all airlines including EK would have to pay).



    56 types. 38 countries. 24 airlines.
    User currently offlineRuscoe From Australia, joined Aug 1999, 1605 posts, RR: 2
    Reply 9, posted (2 years 7 months 3 weeks 4 days 20 hours ago) and read 19434 times:

    When it all boils down, it is about risk!!

    Having a big brother or sugar daddy allows you to take the risks necessary to grow when more prudent
    operators cannot, because of the risk to shareholders.

    It is about who are the shareholders.
    I don't know who the shreholders are at Emirates, but I would be surprised if it is freely traded.

    Fundamentally, this is the same reason Airbus was able to become the number one Commercial Airliner producer.

    Ruscoe


    User currently offlineSuperCaravelle From Netherlands, joined Jan 2012, 259 posts, RR: 0
    Reply 10, posted (2 years 7 months 3 weeks 4 days 20 hours ago) and read 19329 times:

    Quoting rogercamel (Reply 7):
    IMHO EK may not receive subsidies in the same way that state airlines have in the past. But - the business environment they find themselves in is probably favourable compared to other airlines, particularly those in the west. I doubt they have the same union issues that US and European carriers do enabling them to react quicker, and be more flexible and re-shapre their business to suit the economics.

    I'd be interested to know how EK has funded its expansion. Has it been through raising debt funding? From equity investors?

    Well, that's more a problem of the other carriers than of EK, right? You can't expect EK to adhere to policies of other countries just to keep a level playing field.

    EK might have expanded using debt funding from equity investors, but don't forget that they are competing against airlines that have enjoyed up to 80 years of regulated government support. It's not an excuse, but it puts things into perspective.


    User currently onlinePanHAM From Germany, joined May 2005, 9739 posts, RR: 31
    Reply 11, posted (2 years 7 months 3 weeks 4 days 20 hours ago) and read 19300 times:

    Quoting Ruscoe (Reply 9):
    Having a big brother or sugar daddy allows you to take the risks necessary to grow when more prudent
    operators cannot, because of the risk to shareholders.

    Bingo - not only that. Big brother is the owner, or in the case of Abu Dhabi the uncle of the owner. The owner sets the rules without any public controls. By decret there is an airline which gets all it wants, no night curfews, no obstacles, the owner is at bthe same time the state civl aviation authority. need new terminal? No problem. need new airport with 6 or so unways? Will do it. All that in a fraction of the time it takes in Europe or Norrh America where legal processes have to be observed. Not only in building infrastructure but in managing public corporations as well.



    Es saugt und blaest der Heinzelmann wo Mutti sonst nur blasen kann. Frueher war mehr Lametta.
    User currently offlineQuokkas From , joined Dec 1969, posts, RR:
    Reply 12, posted (2 years 7 months 3 weeks 4 days 19 hours ago) and read 19097 times:

    Quoting boeing773W (Reply 3):
    They've engaged in a campaign

    They are engaged in a campaign and responding to frequent accusations made by some airlines that EK has "unfair" advantages and needs to be curbed. The fact that it was prepared by Emirates does not invalidate the contents, although they will of course have been carefully selected to support the company's position. It would be interesting to see actual facts and figures produced by the opponents of EK, rather than just innuendo and baseless stories.

    Quoting AeroWesty (Reply 6):
    to detail what they believe to be gov't subsidies for airlines outside of the region.

    Because the push to curb EK's growth is mainly coming from outside the region. AF, LH, AC have loudly and repeatedly made claims without evidence that EK is subsidised, receives cheap fuel, pays no fees at DXB, etc, etc. This pamphlet seeks to refute those claims so obviously it concentrates on those countries where the greatest opposition comes from. But it would be interesting to see to what extent other carriers in the region are subsidised.

    Quoting rogercamel (Reply 7):
    I'd be interested to know how EK has funded its expansion

    Through a combination of EXIM guarantees, bond issues, Islamic finance, finance leases...

    Quoting Zkpilot (Reply 8):
    I love it how they compare historical subsidies...

    Emirates has been around since 1985. Some of the "historical subsidies" referred to include 2009 and 2010.

    Quoting Zkpilot (Reply 8):
    impose tariff fares on the likes of EK

    Some bilaterals allow for that: for example Germany has threatened EK with fines if it did not raise its fares on some routes following complaints from LH.

    Quoting Ruscoe (Reply 9):
    I don't know who the shreholders are at Emirates,

    EK is part of the Emirates Group which is owned by the Dubai Investment Corporation, a government corporation.


    User currently offlinerogercamel From Singapore, joined Feb 2012, 88 posts, RR: 0
    Reply 13, posted (2 years 7 months 3 weeks 4 days 19 hours ago) and read 19095 times:

    Quoting SuperCaravelle (Reply 10):
    Well, that's more a problem of the other carriers than of EK, right?

    What I was trying to say is that even though EK may not receive subsidies, it does have business advantages against other carriers. Be that through the tax policies.



    Quoting Ruscoe (Reply 9):
    It is about who are the shareholders.
    I don't know who the shreholders are at Emirates, but I would be surprised if it is freely traded.

    My thoughts too. If the investors are government owned companies they will take a different view in relation to expected returns and approach for risk.


    User currently offlineIndianicWorld From Australia, joined Jun 2001, 3028 posts, RR: 0
    Reply 14, posted (2 years 7 months 3 weeks 4 days 19 hours ago) and read 19082 times:

    Oh the EK debate again, but this time stirred up by the airline itself.

    Whatever the reason, it should just focus on itself instead of spin to further enhance its strong position.


    User currently offlineairbazar From United States of America, joined Sep 2003, 8656 posts, RR: 10
    Reply 15, posted (2 years 7 months 3 weeks 4 days 18 hours ago) and read 19004 times:

    Debunking myths? Looks more like they're digging a bigger hole for themselves  
    Even if they're better than the rest, they clearly don't understand the ingrained menthality in the West: Never trust a government entity. And that's exactly what EK is, a government entity. Usually when a government entity puts out something like this it's because they're trying to hide something. Whether that's true or not for EK, it really doesn't matter because of popular perception. They should just continue to focus on what they do best.


    User currently offlineconnies4ever From Canada, joined Feb 2006, 4066 posts, RR: 13
    Reply 16, posted (2 years 7 months 3 weeks 4 days 18 hours ago) and read 18961 times:

    Quoting airbazar (Reply 15):
    Even if they're better than the rest, they clearly don't understand the ingrained menthality in the West: Never trust a government entity.

    I'd say more than likely an ingrained mentality in the USA, not the West. Thanks to the GOP and Tea Party, in part. And I am not entirely convinced that statement is completely true in the USA, if I may say. In Canada, for example, there is trust in a number of government institutions, the health care system for one, justice another. Frustration at times, absolutely. It's not always done right, but usually. We rely on it.

    Off-topic, and apologies for that, but your statement is rather sweeping.



    Nostalgia isn't what it used to be.
    User currently offlineElPistolero From Canada, joined Feb 2012, 1039 posts, RR: 4
    Reply 17, posted (2 years 7 months 3 weeks 4 days 18 hours ago) and read 18835 times:

    Oh goody. The perfect cure for a sore-throat ravaged Saturday morning.  

    I haven't even read the article yet, but I see the same old objections are all over the place.

    From where I stand, this is a biased piece of paper. But so what? It is another voice on an issue that has been far too one-sided in the recent past. I have spent the last few days scrolling through the Canadian Senate's ongoing hearing about the state of the airline industry in Canada, and the one thing that struck me is that there are a lot of myths that are being propogated by Air Canada that are being relentlessly dismissed by academics, bureaucrats etc at the Senate. A lot of those myths appear on Air Canada related threads here. I imagine the same can be said for a lot of other criticism by other carriers.

    As far as I am concerned, this is a welcome addition to the literature on the topic, but it does not represent the whole story or the final say. It simply brings to the fore things that other airlines have been reluctant to talk about. From the perspective of a.net, I think a report like this should be welcomed, because it contributes to the overall shedding of light on the topic from a variety of angles, rather than the usual anti-EK diatribes. There is an element of self-righteousness in these debates that we should take into account - from both sides. This document, flawed though it likely will be, will contribute to perhaps a fairer assessment of the situation. Let us also consider the words of a cheeky Frenchman who famously said "The English created the idea of fairness and generously let everyone else put it into practice". Let us thank the English for their generosity and do that, shall we?

    Quoting boeing773W (Reply 3):
    They've engaged in a campaign of trying to portray other airlines in a bad light for receiving various funds/bailouts, which according to EK amount to subsidies. Are and are they trying to use that as an excuse for something?!?

    Or they're just pointing out that people in glass houses shouldn't....walk around without any clothes on. Or something to that effect.

    Quoting boeing773W (Reply 3):
    Also, with respect, but a quote "from their auditors PWC" means nothing. Of course their own auditors will confirm EK's story. An auditor's report is effectively an opinion and nothing more. Most aren't worth the paper they're written on frankly (think back to Arthur Andersen's "audits" of Enron and you get the picture).

    If auditing is such a hoax, why does anyone even bother. To be quite honest, this comment makes no sense. PWC is a global brand, not the guy down the road. Their 'opinion' is informed. They have a global presence so their quality holds some water with people. Perhaps because they generally do get it right?

    Quoting mdavies06 (Reply 4):
    Dubai as a emirate could not afford its expansion without Abu Dhabi. I did not see this mentioned at all in this document. Its benefit from its oil neighbor is very broadbased across its entire economy.

    After subsidizing EK, Abu Dhabi decided to create its own airline to compete with EK generally on the same routes. It all adds up. Or does it?

    Quoting mdavies06 (Reply 4):
    DXB and EK would not have had their successes without the Abu Dhabi subsidy.

    Again, why would Abu Dhabi subsidize EK and DXB when its entered into direct competition with them. Does the Abu Dhabi emir get kicks out of giving EK money while EY helps him lose some money? It would take a real leap of irrationality to engage in this strategy of supporting one's main competitor at the one's own cost.

    Quoting mdavies06 (Reply 4):
    Obviously a scenario which would have played out was for the Dubai emirate to sell its state assets including EK but as it was eventually bailed out this scenario did not happen.

    As opposed to the bailouts all over the world that have left many more people unemployed than employed? Selling state assets for a bailout is great, but if you can avoid it, wouldn't you? Look at unemployment rates in Greece right now.

    Quoting PanHAM (Reply 5):
    True, many countries subsidize airlines, India is a good, better, a bad example. However, this pamphlet is biased and the bottom line is what the airline wanted to read.

    I don't think it was ever meant to be unbiased. It is merely a response to the equally biased 'facts' coming out of LH.

    Quoting rogercamel (Reply 7):
    You can tailor virtually any set of statistics to meet your own aims.

    Which everyone is doing, so why not EK as well? AC famously declared that a daily EK flight to YYZ would result in tens of thousands of job losses - a claim repeated by the then-transport Minister who, as the present foreign minister, has done more to improve Canada-UAE relations than any of his predeccessors.

    Quoting rogercamel (Reply 7):
    the business environment they find themselves in is probably favourable compared to other airlines, particularly those in the west. I doubt they have the same union issues that US and European carriers do enabling them to react quicker, and be more flexible and re-shapre their business to suit the economics.

    Indeed, but that is hardly their fault. I don't care much for the labor angle. Fact is, if we did, Airlines would open themselves up for criticism given their willingness to buy products from countries with equally lax labor laws (pillows and whatnot from China etc).

    Quoting Ruscoe (Reply 9):
    Having a big brother or sugar daddy allows you to take the risks necessary to grow when more prudent
    operators cannot, because of the risk to shareholders.

    Amen, as we have seen in Canada with Air Canada and the government. But that said, most Euro legacy carriers also had sugar daddies during their inception and consolidation stages. Where would they have been witout government support in those critical early years?

    Quoting PanHAM (Reply 11):
    Bingo - not only that. Big brother is the owner, or in the case of Abu Dhabi the uncle of the owner. The owner sets the rules without any public controls. By decret there is an airline which gets all it wants, no night curfews, no obstacles, the owner is at bthe same time the state civl aviation authority. need new terminal? No problem. need new airport with 6 or so unways? Will do it. All that in a fraction of the time it takes in Europe or Norrh America where legal processes have to be observed. Not only in building infrastructure but in managing public corporations as well.

    Why does it have to be privately owneed? WHy does it have to have public controls? There are many large family owned organizations that are doing very well. Why bring external shareholders in?

    The rest of your post is about public policy. If a state decrees that something is in its strategic interest, it moves forward with it. China's astronomical growth is based on this simple rule. Dubai recognized the potential for tourism and the hub system and ran with it, in much the same way as China had little regard for peasants when it took over land and turned them into sprawling industrial zones. While the observance of legal processes is great and all, every country is entitled to do what it thinks is best for its people (we call it sovereignty). The UAE has followed a tourism and hub airport model (as well as a financial hub and shipping hub model) that has proven to be very successful. By contrast, Germany taxes like it is going out of style, though to be fair to Germany, they've never really aspired to be a tourist destination in the same league as UAE, France, or more recently, Turkey.

    China too builds factories faster than anyone else. Factories that build, among other things, Airbus aircraft and other components for airlines like LH.

    Is it unfair? No. No one is stopping Germany from adopting the same policy. Germany is choosing not to. If I insist on wearing uncomfortable shoes, can I blame you for wearing comfortable shoes and insist that you change them?

    Quoting airbazar (Reply 15):
    Debunking myths? Looks more like they're digging a bigger hole for themselves

    The problem with emotive topics such as this one is that there is a whole lot of ideology and mythology associated with it.

    Quoting airbazar (Reply 15):
    . And that's exactly what EK is, a government entity. Usually when a government entity puts out something like this it's because they're trying to hide something.

    With all due respect, that's nonsense. EK is responding to claims. If it keeps quiet, you can accuse it of trying to hide something. If it responds you can (and do) accuse it of hiding something. Damned if they do, damned if they don't, eh?


    User currently offlineSInGAPORE_AIR From United Kingdom, joined Nov 2000, 13745 posts, RR: 19
    Reply 18, posted (2 years 7 months 3 weeks 4 days 17 hours ago) and read 18807 times:

    Quoting boeing773W (Reply 3):
    They've engaged in a campaign of trying to portray other airlines in a bad light for receiving various funds/bailouts, which according to EK amount to subsidies. Are and are they trying to use that as an excuse for something?!?

    Emirates appears to have engaged in a defensive campaign to take on the throwaway lies that are insinuated or explictly given by certain airlines and their supporters (including those on this forum).

    Quoting rogercamel (Reply 7):
    Has it been through raising debt funding? From equity investors?

    Mainly from debt. Equity in 2002 was AED 692.2m (US$188.4m). In 2011 this had risen to AED 801.0m (US$218.1m).

    Page 14 of the document shows that they have raised US$26bn of finance over the last 15 years: operating leases 43%, commercial banks 19%, ExIm banks 12%, bond issuance 9%, ECA 13%, Islamic finance 4%.

    In 2011 for example, Emirates Airline raised US$1bn via a bond with a coupon of 5.125%. Singapore Airlines issued S$300m (US$ 242.6m) of bonds with a coupon of 2.15%.

    Quoting Zkpilot (Reply 8):
    I love it how they compare historical subsidies

    Many of the examples are not that historic.

    Quoting Zkpilot (Reply 8):
    It is a sovereign issue,

    Tax is indeed a sovereign issue. However, the argument many imply on this forum is that Emirates should be unfairly treated in its own country and be charged corporation tax. I do not think imposing tariffs on Emirates by other countries would be seen in a good light, particularly at the World Trade Organization. And why just middle-eastern airlines then ? Why not any airline that operates from a country with lower corporation taxes (from which all industries in that economy benefit) such as say, Singapore, Hong Kong SAR and even the United Kingdom (30%) compared to Australia.

    Quoting airbazar (Reply 15):
    Never trust a government entity

    Perhaps some dramatic cynicism there but clearly 31.4m passengers trusted Emirates to transport them in the year ending 31 March 2011.



    Anyone can fly, only the best Soar.
    User currently offlineAngMoh From Singapore, joined Nov 2011, 504 posts, RR: 0
    Reply 19, posted (2 years 7 months 3 weeks 4 days 17 hours ago) and read 18641 times:

    Quoting rogercamel (Reply 13):
    What I was trying to say is that even though EK may not receive subsidies, it does have business advantages against other carriers. Be that through the tax policies.

    Is it the fault of EK that the tax policies are beneficial? Every country has its own pros and cons: the trick is to make best advantage of that.

    Quoting rogercamel (Reply 13):
    My thoughts too. If the investors are government owned companies they will take a different view in relation to expected returns and approach for risk.

    There are big differences in shareholders and you can not generalize. Some governments which are big shareholders want to maximize profits (Singapore), other just create jobs for their buddies (Malaysia) and even other ones are just concerned about the next election (Canada). I think in Dubai they just want more money for nicer toys...


    User currently offlinejfk777 From United States of America, joined Aug 2006, 8498 posts, RR: 6
    Reply 20, posted (2 years 7 months 3 weeks 4 days 17 hours ago) and read 18598 times:
    Support Airliners.net - become a First Class Member!

    Quoting RyanairGuru (Reply 1):
    3) EK's fuel costs are pretty much average. Incidentally on this point, I've never understood those who purport that EK receives subsidised oil because even if they did get it in DXB, how do they get free oil in SYD?

    IF they do receive a subsidy, sudsidized in Dubai would be a chunk of the cost, but I did say "IF".


    User currently offlineSKY1 From Spain, joined Apr 2006, 879 posts, RR: 4
    Reply 21, posted (2 years 7 months 3 weeks 4 days 16 hours ago) and read 18517 times:

    While any additional competition is always welcomed, I'd like to read someday a comprehensible and truly independent audit about the EK growth.

    Quoting boeing773W (Reply 3):
    It was prepared by Emirates. What else did you expect them to say?!?

      

    I assume that nobody here could expect for a fair, search-the-truth report. EK is here as the main involved side, so this a pamphlet that selfishly try to get confusion mixing half-truth when talking about others, with no a single own mention for the very friendly-business environment they find from the government, finance easiness (way more than average in the industry) or lack of work rights/trade unions among others.

    Of course EK is not getting oil for free, it's an absurd myth ...but that piece of paper is as worthless as biased just exactly like to claim they're getting Jet A1 for free or way cheaper.

    Quoting ElPistolero (Reply 17):
    From the perspective of a.net, I think a report like this should be welcomed, because it contributes to the overall shedding of light on the topic from a variety of angles


     

    English is not my first language but I still understand that "variety" word means "The quality or condition of being various or varied" ...so, tell me how is it possible "a variety" coming from a single, very biased source.



    Time flies! Enjoy life!
    User currently onlinePanHAM From Germany, joined May 2005, 9739 posts, RR: 31
    Reply 22, posted (2 years 7 months 3 weeks 4 days 16 hours ago) and read 18510 times:

    Quoting ElPistolero (Reply 17):
    Is it unfair? No. No one is stopping Germany from adopting the same policy. Germany is choosing not to. If I insist on wearing uncomfortable shoes, can I blame you for wearing comfortable shoes and insist that you change them?

    The difference to the mentioned countries is that, like Canada, Germany is a democracy, ruled by the law and not by decret. It takes 15 to 20 years to build infrastructure projects. That answers your questions, I believe.



    Es saugt und blaest der Heinzelmann wo Mutti sonst nur blasen kann. Frueher war mehr Lametta.
    User currently offlineDocpepz From Singapore, joined May 2001, 1971 posts, RR: 3
    Reply 23, posted (2 years 7 months 3 weeks 4 days 16 hours ago) and read 18438 times:

    I'm not entirely sure EK's stats on labour costs are accurate. I compiled a list from various airline reports

    http://img.photobucket.com/albums/v4...9/docpepz/AirlineEmployeeCosts.png

    You can see that SQ's costs are more like USD 83k per employee and not USD45k as EK's stats show.


    User currently offlineconnies4ever From Canada, joined Feb 2006, 4066 posts, RR: 13
    Reply 24, posted (2 years 7 months 3 weeks 4 days 16 hours ago) and read 18422 times:

    Quoting ElPistolero (Reply 17):
    Quoting boeing773W (Reply 3):
    Also, with respect, but a quote "from their auditors PWC" means nothing. Of course their own auditors will confirm EK's story. An auditor's report is effectively an opinion and nothing more. Most aren't worth the paper they're written on frankly (think back to Arthur Andersen's "audits" of Enron and you get the picture).

    If auditing is such a hoax, why does anyone even bother. To be quite honest, this comment makes no sense. PWC is a global brand, not the guy down the road. Their 'opinion' is informed. They have a global presence so their quality holds some water with people. Perhaps because they generally do get it right?

    The Arthur Andersen &* Associates comparison is quite valid - Enron was a shell game but AA & A said it was a solid investment. Standard & Poor's rated Goldman Sachs as a solid investment only months before it collapsed. If you think these organisations are not prostituted to the fees they receive, you're smoking something. Of course PWC would say what EK wanted.

    Quoting ElPistolero (Reply 17):
    Quoting Ruscoe (Reply 9):
    Having a big brother or sugar daddy allows you to take the risks necessary to grow when more prudent
    operators cannot, because of the risk to shareholders.

    Amen, as we have seen in Canada with Air Canada and the government. But that said, most Euro legacy carriers also had sugar daddies during their inception and consolidation stages. Where would they have been witout government support in those critical early years?

    Remember that AC was privatised mid-80s. So there is no sugar daddy. As well, ACPPA and the unfortunate interventions in free and fair labour negotiations by the current government (oddly enough, which supposedly supports laissez-faire marketplace rules) have seriously hobbled AC's ability to function as a truly private entity.

    As well, during its' tenure as a Crown Corporation, AC returned more money to the crown than it lost. Significant profits in the 70s, 80s, and 90s, for example, were more common than not.

    This link to a recent Financial Post article on Air Canada may be of interest:
    http://business.financialpost.com/20...ver-lasting-effects-on-air-canada/



    Nostalgia isn't what it used to be.
    User currently offlineRyanairGuru From Australia, joined Oct 2006, 5939 posts, RR: 5
    Reply 25, posted (2 years 7 months 3 weeks 4 days 16 hours ago) and read 18481 times:

    Quoting ElPistolero (Reply 17):

    ElPistolero, as always a fantastic post.

    Quoting ElPistolero (Reply 17):
    From where I stand, this is a biased piece of paper. But so what? It is another voice on an issue that has been far too one-sided in the recent past. I have spent the last few days scrolling through the Canadian Senate's ongoing hearing about the state of the airline industry in Canada, and the one thing that struck me is that there are a lot of myths that are being propogated by Air Canada that are being relentlessly dismissed by academics, bureaucrats etc at the Senate. A lot of those myths appear on Air Canada related threads here. I imagine the same can be said for a lot of other criticism by other carriers.

    As far as I am concerned, this is a welcome addition to the literature on the topic, but it does not represent the whole story or the final say. It simply brings to the fore things that other airlines have been reluctant to talk about. From the perspective of a.net, I think a report like this should be welcomed, because it contributes to the overall shedding of light on the topic from a variety of angles, rather than the usual anti-EK diatribes. There is an element of self-righteousness in these debates that we should take into account - from both sides. This document, flawed though it likely will be, will contribute to perhaps a fairer assessment of the situation.

    While my comments in post 1 probably show which side of this I stand on, I think your absolutely right: AC/LH/etc say one thing, EK say another, and the truth is in the middle. After all that is (theoretically) how the common law adversarial approach works!

    Quoting ElPistolero (Reply 17):
    There are many large family owned organizations that are doing very well. Why bring external shareholders in?

    I believe that there is a little company called Virgin...

    Quoting ElPistolero (Reply 17):
    It would take a real leap of irrationality to engage in this strategy of supporting one's main competitor at the one's own cost.

    While it is true that Abu Dhabi did bail out Dubai during the GFC, you are of course right: on the face of it it was totally irrational. The only reason I can think of was that Abu Dhabi didn't want the WTO and IMF poking around in the UAE.

    Quoting ElPistolero (Reply 17):
    every country is entitled to do what it thinks is best for its people (we call it sovereignty)

    Bingo. While western liberal countries now adhere to something called "liberal internationalism", most developing countries still strictly uphold Westphalian principles. It is entirely their right to do so.

    Quoting ElPistolero (Reply 17):
    No one is stopping Germany from adopting the same policy. Germany is choosing not to

    Correct again. If Canada wanted to give AC a 0% tax rate there is nothing (as far as I'm aware) to stop them from doing so at least from an international perspective (of course domestic politics is something altogether different)

    Quoting SInGAPORE_AIR (Reply 18):
    And why just middle-eastern airlines then ? Why not any airline that operates from a country with lower corporation taxes (from which all industries in that economy benefit) such as say, Singapore, Hong Kong SAR and even the United Kingdom (30%) compared to Australia.

    HK has a lower corporate tax rate than Australia, but your point still stands. Let's not lose sight of the fact that Ireland has (had?) a very low corporate tax rate which obviously benefited EI and (in particular) FR.

    Quoting SKY1 (Reply 21):
    so, tell me how is it possible "a variety" coming from a single, very biased source.

    I think he was referring to the fact that AC et al claim A and EK claim B ... and we can judge these competing claims.



    Worked Hard, Flew Right
    User currently offlineSKY1 From Spain, joined Apr 2006, 879 posts, RR: 4
    Reply 26, posted (2 years 7 months 3 weeks 4 days 15 hours ago) and read 18085 times:

    Quoting RyanairGuru (Reply 25):
    I think he was referring to the fact that AC et al claim A and EK claim B

    Dunno, we must to ask him, then .....but still we're talking on this thread about the "document" that has been prepared by EK, on the link provided by the initial poster.



    Time flies! Enjoy life!
    User currently offlinemia From United States of America, joined Feb 2004, 876 posts, RR: 1
    Reply 27, posted (2 years 7 months 3 weeks 4 days 15 hours ago) and read 18249 times:

    In a war of words, Emirate has put their best foot forward. I feel other companies would have done the same if they had any basis for their accusations statements. The key issues is: do we want free markets or not?


    "Like all great travelers, I have seen more than I remember, and remember more than I have seen."
    User currently offlineElPistolero From Canada, joined Feb 2012, 1039 posts, RR: 4
    Reply 28, posted (2 years 7 months 3 weeks 4 days 15 hours ago) and read 18106 times:

    Quoting SKY1 (Reply 21):
    EK is here as the main involved side, so this a pamphlet that selfishly try to get confusion mixing half-truth when talking about others, with no a single own mention for the very friendly-business environment they find from the government, finance easiness (way more than average in the industry) or lack of work rights/trade unions among others.

    Alright, then lets put it this way: We live in an age of globalization, yes? Every multinational company is competing on a global scale, yes? People are buying products made all around the world, yes? The thing that troubles me about posts that talk about "friendly business environment", "finance easiness" or "lack of work rights/trade unions", is that if you are going to use those as key sticking points, then apply them equally. But can you? Would LH be profitable if it had to buy all of its products in Germany? Would AC's finances be better if they didn't buy products from China? Or more simply, are you typing your post on a computer without any components from China, to which those three criteria apply equally? The reason I find these arguments meaningless is because many, many westerners are buying goods from abroad because they are cheaper when they come from abroad. And they are cheaper, because they invariably benefit from the three criteria you have posted here. Should we start punishing them all? This is what the world is now about - bottom lines. If you can buy it cheaper elsewhere, then in most industries, its not only allowed - its encouraged. Why should it not apply to the aviation industry?

    Now, you could logically argue that aviation is a strategic industry. And I agree. It is. But then western governments need to start treating it like one, by trying to get those three criteria to apply to their own countries (within reason on the labor angle). What stops Germany from becoming a airline business friendly environment (it is business friendly for a number of other industries)? Why can't Britain, a financial capital, facilitate finance easiness?

    The simple truth is that aviation is treated as a cash cow. Should we be complaining about that? Or should we complaining about the UAE not treating its own airlines as cash cows? Say waht you want about EK/EY, I dont think anybody can deny that they have put the UAE firmly on the map as a major global center, not just for aviation, but for tourism and business as well. IN other words, in a results-based world, the UAE haven't done too badly.

    Quoting SKY1 (Reply 21):
    English is not my first language but I still understand that "variety" word means "The quality or condition of being various or varied" ...so, tell me how is it possible "a variety" coming from a single, very biased source.

    As opposed to the vitriol coming from AC/LH/AF etc, which, of course, is varied. Well I suppose its varied insofar as the letterhead is different, but the arguments are identical. The more the merrier, I say. It would be nice if EY, AI etc added their voices too, but for now, this will have to do.

    Quoting PanHAM (Reply 22):
    The difference to the mentioned countries is that, like Canada, Germany is a democracy, ruled by the law and not by decret. It takes 15 to 20 years to build infrastructure projects. That answers your questions, I believe.

    Fair enough. So what do you propose? That we stop trading with all non-democracies? I am all for it, as long as it applies equally. What next? Ban Chinese products and Air China and cancel all LH flights to China? The democracy angle works well as a rhetoric barb, but then you have to punish all non-democracies equally. It can't just be one but not the other.

    Quoting connies4ever (Reply 24):
    The Arthur Andersen &* Associates comparison is quite valid - Enron was a shell game but AA & A said it was a solid investment. Standard & Poor's rated Goldman Sachs as a solid investment only months before it collapsed. If you think these organisations are not prostituted to the fees they receive, you're smoking something. Of course PWC would say what EK wanted.

    Again, that proves nothing. Its neither here nor there. By this logic, we should disband all auditors. Yet they persist. Why? You can't go around flaunting a prostitute as your wife if everyone knows she a prostitute, right? So why are people still giving companies their business? And why are governments not disbanding them for engaging in fraud?

    Quoting connies4ever (Reply 24):
    Remember that AC was privatised mid-80s. So there is no sugar daddy. As well, ACPPA and the unfortunate interventions in free and fair labour negotiations by the current government (oddly enough, which supposedly supports laissez-faire marketplace rules) have seriously hobbled AC's ability to function as a truly private entity.

    ACs case is perhaps a little different to others Euro legacies, but I would still contend that on balance, former government airlines have benefitted greatly from the monopolies and advantages hoisted on them (this includes the Euro carriers of course). As hobbled as AC is, it clearly has no qualms about running to the government everytime its in a little bit of trouble, be it with competitors, or its own workers, which suggests that some beneficial close links still remain. For its part, the government occassionally acts like it owns AC (everytime AC drops a direct flight from Ottawa AC's relationship with the Govenrment of Canada occassionally borders on the absurd, I nonetheless submit that this does not necessarily apply to all the European legacies who havent faced similar pressures.

    [Edited 2012-04-28 08:20:56]

    [Edited 2012-04-28 08:22:37]

    User currently offlineElPistolero From Canada, joined Feb 2012, 1039 posts, RR: 4
    Reply 29, posted (2 years 7 months 3 weeks 4 days 15 hours ago) and read 18067 times:

    Quoting SKY1 (Reply 26):
    Dunno, we must to ask him, then .....but still we're talking on this thread about the "document" that has been prepared by EK, on the link provided by the initial poster.

    There are many threads on Airliners.net that carry the AC/LH/AF claims. In some cases (as on one of the currently active AC threads), some of the posters are posting, word for word, segments from AC's documents.

    Now, it would have been nice if the original poster had put them all in his opening post, but for the time being, I think it would be sensible to approach this document in the context of the statements by AC and LH and others. This is, after all, a direct response to them.


    User currently offlineSKY1 From Spain, joined Apr 2006, 879 posts, RR: 4
    Reply 30, posted (2 years 7 months 3 weeks 4 days 15 hours ago) and read 18015 times:

    Quoting mia (Reply 27):
    Emirate has put their best foot forward

    Why? just for doing a .... a .....dunno how I could call it ....an advertising feature? They invent a scenario where the assertion can be taken out of context and misrepresented with the final goal of intended to mislead

    Quoting mia (Reply 27):
    The key issues is: do we want free markets or not?

    Yes, we do! (but not at any price)



    Time flies! Enjoy life!
    User currently offlineCubsrule From United States of America, joined May 2004, 23302 posts, RR: 20
    Reply 31, posted (2 years 7 months 3 weeks 4 days 15 hours ago) and read 17982 times:

    Quoting ElPistolero (Reply 17):
    As far as I am concerned, this is a welcome addition to the literature on the topic, but it does not represent the whole story or the final say. It simply brings to the fore things that other airlines have been reluctant to talk about.

    I think this sentiment is exactly right, but just as . . .

    Quoting Quokkas (Reply 12):
    It would be interesting to see actual facts and figures produced by the opponents of EK, rather than just innuendo and baseless stories.

    . . . it would also be interesting to see some more statistics from EK in this report. Their tax "statistics" are a hypothetical. They say that they pay "the same airport handling fees to dnaka as would a similar high volume airline customer." There is no such "similar high volume airline customer" so that, too, is a hypothetical. I haven't made up my mind about the argument about EK's "unfair advantages," and, frankly, this paper doesn't really help me much.



    I can't decide whether I miss the tulip or the bowling shoe more
    User currently offlineRevelation From United States of America, joined Feb 2005, 12957 posts, RR: 25
    Reply 32, posted (2 years 7 months 3 weeks 4 days 14 hours ago) and read 17593 times:

    Quoting SInGAPORE_AIR (Thread starter):

    Airlines and Subsidy: Our Position

    Summary: Mommy, Billy's doing it too!



    Inspiration, move me brightly!
    User currently offlineSKY1 From Spain, joined Apr 2006, 879 posts, RR: 4
    Reply 33, posted (2 years 7 months 3 weeks 4 days 14 hours ago) and read 17497 times:

    Quoting ElPistolero (Reply 28):
    Alright, then lets put it this way: We live in an age of globalization, yes?

    Yeah but globalization is often used to make excuses and/or blackmail when a company wants to get one's own way. You told it: every country is entitled to do what it thinks is best for its people ...so, what's first? Globalization or sovereignty?

    Globalization is a term from sociology, sovereignty is an old term from the Public International Law.

    Quoting ElPistolero (Reply 28):
    What stops Germany from becoming a airline business friendly environment

    ...What stops Germany from becoming a airline business friendly environment "à la UAE" do u mean? What do u think? maybe the respect of Law? a different History? a different Culture? a different sociology? Germany or any Western country has nothing to do with an Isolated Peninsula between African and Asia where they were lucky enough to discover oil during the 20th century.

    Different precedents must be having into account when trying get a conclusion. Globalization doesn't mean "I'm going to do everything that I want to do"

    Sovereignty and law is above globalization, we should NOT forget that.



    Time flies! Enjoy life!
    User currently onlinePanHAM From Germany, joined May 2005, 9739 posts, RR: 31
    Reply 34, posted (2 years 7 months 3 weeks 4 days 14 hours ago) and read 17269 times:

    Quoting ElPistolero (Reply 28):
    Fair enough. So what do you propose? That we stop trading with all non-democracies? I am all for it, as long as it applies equally. What next? Ban Chinese products and Air China and cancel all LH flights to China? The democracy angle works well as a rhetoric barb, but then you have to punish all non-democracies equally. It can't just be one but not the other.

    I do not propose anything. I just made a statement to show why a country that is ruled by decret has some "advantages" over countries where every single citizen can appeal a decision made by the executive. I would not trade that and I assume you wouldn't either.

    It does also not matter who owns a coporation, good example is DB German Rail which is 100 % owned by the government but 100% run like a private company. The same rules apply for PLCs, for family owned businesses , for the few state owned companies left and for any private citizen.

    But the statement about subsidies given to LH are plain rubbish and I hjave explained that.



    Es saugt und blaest der Heinzelmann wo Mutti sonst nur blasen kann. Frueher war mehr Lametta.
    User currently offlinelightsaber From United States of America, joined Jan 2005, 13529 posts, RR: 100
    Reply 35, posted (2 years 7 months 3 weeks 4 days 14 hours ago) and read 17277 times:
    Support Airliners.net - become a First Class Member!

    I found the attachment interesting. However, I can already see here on a.net most already have an opinion. Dubai's economy is heavy in the service sector. Their main advantage is flexibility of work force. The other advantage is that when their main regional commercial competitor, Bahrain, suffered from the 'Arab Spring' Dubai had an influx of business and population.

    My point is how does an *oil importer* subsidize their airline?!? Dubai is dependent on EK's growth. Yes, Dubai subsidized EK early on. (IIRC purchased the 727s).

    Quoting mdavies06 (Reply 4):
    DXB and EK would not have had their successes without the Abu Dhabi subsidy. They are very interlinked in my view. Without the bailout in 2009-2010 Dubai as a emirate would have had to seek help from the IMF.

    Abu Dhabi and Dubai are rivals. There is no subsidy but rather a loan to keep the region from collapsing economically. There was some sort of agreement to leave certain business to Abu Dhabi. I don't pretend to know the details.

    http://news.bbc.co.uk/2/hi/8418013.stm

    Quoting AeroWesty (Reply 6):
    It would be interesting to see the figures for subsidies given to their neighboring competitors in the same detail.

    QR and EY certainly couldn't put out a similar document. I wonder if some of this is EK going on the offensive against their two stronger regional competitors.

    Quoting SInGAPORE_AIR (Reply 18):
    Emirates appears to have engaged in a defensive campaign to take on the throwaway lies that are insinuated or explictly given by certain airlines and their supporters (including those on this forum).

    EK/Dubai pretty much has to.

    Lightsaber



    Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
    User currently offlineL410Turbolet From Czech Republic, joined May 2004, 5743 posts, RR: 19
    Reply 36, posted (2 years 7 months 3 weeks 4 days 13 hours ago) and read 17230 times:

    Quoting ElPistolero (Reply 17):
    this comment makes no sense. PWC is a global brand, not the guy down the road. Their 'opinion' is informed. They have a global presence so their quality holds some water with people.

    As was Arthur Andersen part of the Big Six prior to the Enron fisaco.

    Quoting ElPistolero (Reply 17):
    to be fair to Germany, they've never really aspired to be a tourist destination in the same league as UAE, France, or more recently, Turkey.

    Are you seriously putting a an artifical bubble of shopping malls and skyscrapers in the middle of sun-scorched desert (aka UAE) in the same league with France or Germany? The latter despite supposedly "not aspiring to be a tourist destination" still has something like 4 times the number of visitiors to the UAE.

    Quoting ElPistolero (Reply 17):
    Dubai recognized the potential for tourism and the hub system and ran with it, in much the same way as China had little regard for peasants when it took over land and turned them into sprawling industrial zones. While the observance of legal processes is great and all, every country is entitled to do what it thinks is best for its people (we call it sovereignty). The UAE has followed a tourism and hub airport model (as well as a financial hub and shipping hub model) that has proven to be very successful.

    Standard societies based on the rule of law do not have the luxury of simply bulldozing farmland/desert and people's livelihoods to turn it within months into a assembly plant or giant airport the way oriental despocies do. No ifs not buts no questions asked no NGOs rightly or wrongly contesting the decision in an independent court. This lack of such luxury is becoming a huge competitive disadvantage on the global scale, however I don't see what you find so impressive about that.


    User currently offlinePanAm1971 From United States of America, joined Aug 2007, 430 posts, RR: 0
    Reply 37, posted (2 years 7 months 3 weeks 4 days 13 hours ago) and read 16686 times:

    ALL nations do what they perceive as being in their best interests. While international treaties (including trade agreements) are important tools of global relations-they are STRICTLY subordinate to the needs and interests of the states that engage in them. In other words-this isn't a game.

    "Fairness" is a matter of perception. Everybody does what's good for themselves. Nations make treaties. Nations break treaties... and sometimes they do a bit of both at the same time while making the truth blurry.

    It seems clear EK a vital part of Dubai's strategic plan for the future. It will do what it takes to make EK succeed.


    User currently offlineElPistolero From Canada, joined Feb 2012, 1039 posts, RR: 4
    Reply 38, posted (2 years 7 months 3 weeks 4 days 13 hours ago) and read 16658 times:

    Quoting SKY1 (Reply 30):
    Quoting mia (Reply 27):
    The key issues is: do we want free markets or not?

    Yes, we do! (but not at any price)

    Errr, wouldn't that, by its very nature, be a regulated 'free' market?

    Quoting SKY1 (Reply 33):
    Yeah but globalization is often used to make excuses and/or blackmail when a company wants to get one's own way. You told it: every country is entitled to do what it thinks is best for its people ...so, what's first? Globalization or sovereignty?

    Who said globalization and sovereignty are a zero sum game? China is perhaps the best example of embracing both at the same time. India and the US are not far behind. Sometimes embracing globalization is in the national interest and pursuing the national interest is,well, exercising sovereignty. Granted any state with a large welfare system will automatically be at a disadvantage, but that is a self-imposed cost.

    Quoting SKY1 (Reply 33):
    ...What stops Germany from becoming a airline business friendly environment "à la UAE" do u mean? What do u think? maybe the respect of Law? a different History? a different Culture? a different sociology? Germany or any Western country has nothing to do with an Isolated Peninsula between African and Asia where they were lucky enough to discover oil during the 20th century.

    What does any of that mean? Respect for law? Is respect for law anti-business by nature? To top it off, aren't several German businesses doing rather well in Dubai? I personally know people working for Siemens and Deutsche Bank there. And I am sure there are others. Apparently German companies are comfortable with the law situation there.

    Culture? Perhaps.

    Sociology? Don't know what that means. . I m tempted to interchange that with Culture.

    Priorities? Far more likely. Overtaxing the aviation industry has precious little to do with culture, nor does it have much to do with the law. Law does not inherently dictate that airlines should be overtaxed, though laws may certainly be passed to overtax airlines.

    Germany (and much of Europe) is overtaxing airlines because the aviation industry is not, to put it mildly, a priority.

    As for the rest, correct me if I m wrong, but wasnt the liberal bilateral between the two nations based on LH's input back in the 1980s, when EK was still an idea? I wouldn't be surprised - LH's recent record in areas "it has nothing to do with" isn't great. Championing AI for *A was ...interesting. Now they're out of 2 cities and almost out of their way from a third Indian city, no?

    Quoting L410Turbolet (Reply 36):
    Are you seriously putting a an artifical bubble of shopping malls and skyscrapers in the middle of sun-scorched desert (aka UAE) in the same league with France or Germany? The latter despite supposedly "not aspiring to be a tourist destination" still has something like 4 times the number of visitiors to the UAE.

    No, I m saying that they've done a pretty good job of making an artificial bubble of shopping malls and skyscrapers in the middle of a sun-scorched desert into a mega financial, aviation and shipping hub in what...3 decades? It takes some doing. That they manage to 25% of Germany's tourism numbers despite being what - 1/10th Germany's population is equally impressive. To top it off, they don't have Europe's rich cultural heritage either. Takes some doing, no?

    Quoting L410Turbolet (Reply 36):
    Standard societies based on the rule of law do not have the luxury of simply bulldozing farmland/desert and people's livelihoods to turn it within months into a assembly plant or giant airport the way oriental despocies do. No ifs not buts no questions asked no NGOs rightly or wrongly contesting the decision in an independent court. This lack of such luxury is becoming a huge competitive disadvantage on the global scale, however I don't see what you find so impressive about that.

    I am really not sure what you mean. All societies are based on the rule of law. How the law is promulgated (democratically or by decree) is another matter. I prefer the democratic ideal, but there's no denying that the despots have improved the lot of their people too.

    That said, are German and European countries not taking advantage of these situations, from which they benefit, in countries like China and the UAE? Do they, or do they not, operate in these countries, taking advantage of government policies.

    Therefore, please get off your high horse. Its not like German companies aren't taking full advantage of the business environments in China and the UAE. Europeans have an interesting habit of making money in these countries and then getting all high and mighty when local companies also benefit from these same conditions. Can't have it both ways.

    [Edited 2012-04-28 10:35:45]

    User currently offlinePanAm1971 From United States of America, joined Aug 2007, 430 posts, RR: 0
    Reply 39, posted (2 years 7 months 3 weeks 4 days 12 hours ago) and read 16599 times:

    Quoting SKY1 (Reply 33):
    Yeah but globalization is often used to make excuses and/or blackmail when a company wants to get one's own way. You told it: every country is entitled to do what it thinks is best for its people ...so, what's first? Globalization or sovereignty?

    Sovereignty... especially in democratic nations where opinions, perceptions, governments and agendas can change with the circumstances. If you look around the world-treaties are constantly being renegotiated... or some new exemption is under discussion.


    User currently offlinezeke From Hong Kong, joined Dec 2006, 9229 posts, RR: 76
    Reply 40, posted (2 years 7 months 3 weeks 4 days 12 hours ago) and read 16577 times:

    Quoting SInGAPORE_AIR (Thread starter):

    This is an update to a document they have previously distributed. I have linked a previous version before as a source when people say EK pay nothing for fuel.

    Most of it should come of no surprise to anyone in industry, most of what they have compiled is available in newspapers and on the net.

    When you have a very modern fleet, your fuel costs are going to be lower, the A380 and 77W have the lowest seat mile costs in their class. When you are based in a region that has low corporate and personal tax, it is going to cost less to employ someone. QF were recently tanking about setting up a premium airline in Asia, one of the main factors driving this from what I understand is the very expensive Australian taxation system and workplace laws. They could employ a person with the same after tax pay in Singapore for approximately 30-40 percent of the package in Australia. If one were to reduce that even lower still like in the UAE to zero, the cost per employee reduces.

    They say they offer attractive packages, they do not offer anywhere near enough to attract me there. I enjoy my visits to DXB, it has to be the most liberal of the places in the middle east I have been, however it still is not enough, I could live there.



    We are addicted to our thoughts. We cannot change anything if we cannot change our thinking – Santosh Kalwar
    User currently offlineAirlineCritic From Finland, joined Mar 2009, 736 posts, RR: 1
    Reply 41, posted (2 years 7 months 3 weeks 4 days 12 hours ago) and read 16413 times:

    Interesting material. Would love to see equally well crafted claims from the likes of LH, AC, and AF.

    Obviously, EK is not the cleanest example of free market operations, but what the detractors often conveniently forget is the extent of similar troubles on their home turf. I also hope that we wouldn't have to keep arguing about the silliest stuff, like cheap oil, how Dubai has oil, etc. EK is a government-private strategic initiative that is designed to put Dubai in the world's air transport map. They do benefit from a number of advantages:

    - excellent location
    - cheap labor (the document's claims notwithstanding)
    - low or non-existent taxation (similar to a number of other places in the world)
    - probably the most airport-building friendly government on the planet
    - economies of scale both in terms of the size of their operations as well as the size of their aircraft
    - capable management

    Naturally, they also have some challenges, such as protectionism from places like India and Europe, growth strategy that would probably hurt if the world took a big downturn, and so on. But so far they are doing very, very well.

    If I look at some of the other airlines in the world, they do have their own advantages and challenges as well. Just to look at some government and legal system support that is enjoyed by the world's most prestigious airlines: state ownership (too many to list but I'll just mention AY), government business preference (US airlines), governments very eager to build airports and even attract airlines to use them (all over Europe, for instance), various protectionist measures such as landing rights and quotas (AC), historical slot allocations in busy airports, the silliness that every major airline in the US can reset its debt with Ch. 11, and so on.

    Lets have the first innocent party throw the first stone!


    User currently offlinewindshear From Denmark, joined Mar 2000, 2334 posts, RR: 11
    Reply 42, posted (2 years 7 months 3 weeks 4 days 12 hours ago) and read 16351 times:

    I am sorry, but the style of writing is completely unreliable.

    This is hardly a scientific paper, but rather yet another PR move. Emotional commercials running on CNN and now emotional "fact sheets".

    Boaz.



    "If you believe breaking is possible, believe in fixing also"-Rebbe Nachman
    User currently offlineconnies4ever From Canada, joined Feb 2006, 4066 posts, RR: 13
    Reply 43, posted (2 years 7 months 3 weeks 4 days 11 hours ago) and read 15732 times:

    Quoting ElPistolero (Reply 28):
    As hobbled as AC is, it clearly has no qualms about running to the government everytime its in a little bit of trouble, be it with competitors, or its own workers, which suggests that some beneficial close links still remain.

    Please provide unbiased evidence for this. AC's resort to CCAA in 2003 was not "running to the government". It was working within standard rules in the Canadian business sphere. Problems in the labour market have been "resolved" by government interference, not by AC asking for help -- unless you can document your assertion.

    Quoting ElPistolero (Reply 28):
    For its part, the government occassionally acts like it owns AC

    I'll agree with you on that, and not occasionally. Always. ACPPA, as long as it is in force, ensures AC will never be able to operate like a truly private entity. Queen Lisa's intervention in labour negotiations does indicate the government views AC as its' toy.



    Nostalgia isn't what it used to be.
    User currently offlineghifty From United States of America, joined Jul 2010, 891 posts, RR: 0
    Reply 44, posted (2 years 7 months 3 weeks 4 days 10 hours ago) and read 15442 times:

    Is this really from EK? The choice of words and phrasing seems to be very unprofessional at times... and the way some of the graphics are arranged doesn't seem very professional. IMO, the pdf reminds me of something one of those fake "Pan Am mk.4" airlines put out and not something one of the largest airlines would.


    Fly Delta Jets
    User currently offlineElPistolero From Canada, joined Feb 2012, 1039 posts, RR: 4
    Reply 45, posted (2 years 7 months 3 weeks 4 days 9 hours ago) and read 15033 times:

    Quoting AirlineCritic (Reply 41):
    Interesting material. Would love to see equally well crafted claims from the likes of LH, AC, and AF.
    http://www.aircanada.com/en/about/media/facts/industry/emirates.html

    Quoting connies4ever (Reply 43):
    Please provide unbiased evidence for this. AC's resort to CCAA in 2003 was not "running to the government". It was working within standard rules in the Canadian business sphere. Problems in the labour market have been "resolved" by government interference, not by AC asking for help -- unless you can document your assertion.

    I've posted this several times now on various threads:

    "Air Canada came to us during the ... global (economic) crisis, and asked specifically for government assistance in a number of areas because of the dangers shutting down the airline would represent to the Canadian economy," Harper said. "I'll be darned if we will now sit by and let the airline shut itself down.

    http://www2.canada.com/story.html?id=6282149

    "While the federal lobbying register shows that Air Canada executives are often in the offices of senior cabinet ministers, it also shows that the pilots union is active on Parliament Hill as well, especially compared with other labour organizations."

    One can only wonder what the AC executives are doing there. Saying hello, I suppose.

    http://www.cbc.ca/news/politics/stor...anada-pilots-unions-relations.html

    The Senate's Study is on this site - navigate through it to read what everyone has to say about AC. Let me put it this way, most people outside of AC have said AC is involved with the government. Are provincial air leads biased? I don't know.

    http://www.parl.gc.ca/SenCommitteeBu...arl=41&ses=1&Language=E&comm_id=19

    I don't know if this link will work. It is the lobbying register.

    https://ocl-cal.gc.ca/app/secure/orl/lrrs/do/cmmLgPblcSrch?frmps=true&searchType=true&clientId=217669&registrantId=735259&startDate=2012-03-15&endDate=&sMdKy=1335647109170
    Calin's boys are there quite often to discuss, among other things, pensions.

    [Edited 2012-04-28 14:07:49]

    User currently offlinesolarflyer22 From US Minor Outlying Islands, joined Nov 2009, 1125 posts, RR: 0
    Reply 46, posted (2 years 7 months 3 weeks 4 days 7 hours ago) and read 14320 times:

    This is an interesting document but there are a few key gaps that aren't addressed in much detail if you read it closely.

    1) Its the Persian Gulf not the "Arabian Gulf". Nice try Shiek. lol
    2) Taxes - Its astounding to me that a mere 1 page is devoted to taxation and they draw illogical analogies instead of breaking down what they pay vis-a-vis a competitor. Bottom line - they pay no corporate income tax even when profitable.

    They say they have to pay more for expatriate pilots (~30%) but turn around and graph labor costs about half that of BA or UA.

    A lot of the subsidies they call out their competitors on were basically during bankruptcy and sometimes date back to the 90s or earlier. I think they do a good job of trying to eliminate myths (free gas etc. ) but whether its 5% or 10% I think they do get some government cheese. Its not the 40% as some would claim though.


    User currently offlineViscount724 From Switzerland, joined Oct 2006, 25999 posts, RR: 22
    Reply 47, posted (2 years 7 months 3 weeks 4 days 7 hours ago) and read 14167 times:

    Quoting solarflyer22 (Reply 46):
    Bottom line - they pay no corporate income tax even when profitable.

    And their UAE-based staff (which must account for 98% of the total) pay no personal income taxes.

    Also, I doubt the document mentions that unions are illegal in the UAE, or mentions how much easier it is to operate at a hub where the same entity (the government) not only owns the airline but also the airport, the ground handling agent, fuel supplier, and serves as the regulatory authority (equivalent of the US FAA and DOT combined).


    User currently offlineconnies4ever From Canada, joined Feb 2006, 4066 posts, RR: 13
    Reply 48, posted (2 years 7 months 3 weeks 4 days 7 hours ago) and read 14120 times:

    Quoting ElPistolero (Reply 45):
    "Air Canada came to us during the ... global (economic) crisis, and asked specifically for government assistance in a number of areas because of the dangers shutting down the airline would represent to the Canadian economy," Harper said. "I'll be darned if we will now sit by and let the airline shut itself down.

    http://www2.canada.com/story.html?id=6282149

    If this page would load, I could read it. Absent that, I can't make a comment.

    Quoting ElPistolero (Reply 45):
    "While the federal lobbying register shows that Air Canada executives are often in the offices of senior cabinet ministers, it also shows that the pilots union is active on Parliament Hill as well, especially compared with other labour organizations."

    One can only wonder what the AC executives are doing there. Saying hello, I suppose.

    http://www.cbc.ca/news/politics/stor...anada-pilots-unions-relations.html


    It would seem that ACPA are as active on parliament Hill as AC may be. So who is really the active lobbyist ?

    Quoting ElPistolero (Reply 45):

    http://www.parl.gc.ca/SenCommitteeBu...arl=41&ses=1&Language=E&comm_id=19

    Try as I might I have not seen a direct reference to AC execs being "busy" with the various committees. I'll try again tomorrow if I have a chance. There are better things to attend to tonight.

    There is no doubt, given AC's many international connections, that they will have a frequent and on-going relationship with the government of the day. This does not mean, in and of it self, that they are "running to the government". There is a responsibility to ensure that all legal obligations are met and that FAIT policies are observed (Foreign Affairs, Industry and Trade). Note also that despite observing FAIT policies, AC's commercial desire to serve YUL-BEY a few years ago was thwarted by the government the day before service was to start, no matter that hundreds of reservations had been taken. Is this a case of "running to the government" ?



    Nostalgia isn't what it used to be.
    User currently offlinemdavies06 From United Kingdom, joined Aug 2009, 387 posts, RR: 0
    Reply 49, posted (2 years 7 months 3 weeks 4 days 7 hours ago) and read 14010 times:

    Quoting lightsaber (Reply 35):
    Quoting mdavies06 (Reply 4):
    DXB and EK would not have had their successes without the Abu Dhabi subsidy. They are very interlinked in my view. Without the bailout in 2009-2010 Dubai as a emirate would have had to seek help from the IMF.

    Abu Dhabi and Dubai are rivals. There is no subsidy but rather a loan to keep the region from collapsing economically. There was some sort of agreement to leave certain business to Abu Dhabi. I don't pretend to know the details.

    http://news.bbc.co.uk/2/hi/8418013.stm

    Thanks for the source. I don't have the details either beyond what is said in the news. What the money has been used for is unkown unless you have access to the data.

    But I would rather think they are brothers and rivals at the same time at a high level.

    Quoting windshear (Reply 42):
    This is hardly a scientific paper, but rather yet another PR move. Emotional commercials running on CNN and now emotional "fact sheets".

    Yeah. However, I do applaud EK for making the effort. Whether the data is distorted or not is obviously hard to establish unless one is in the industry. This is the reason why I have not questioned most of the numbers in the document.

    [Edited 2012-04-28 16:34:02]

    User currently offlinepar13del From Bahamas, joined Dec 2005, 7644 posts, RR: 8
    Reply 50, posted (2 years 7 months 3 weeks 4 days 6 hours ago) and read 13802 times:

    Quoting Zkpilot (Reply 8):
    I love it how they compare historical subsidies... ie from back in the day when all airlines were pretty much subsidized so it was to be expected and when air routes weren't liberalized to the extent they are now. Emirates didn't even exist when most of these were done so I don't see why they are using them as comparisons.

    Maybe because the current carriers they are competing against did not just appear but were created in a subsidized environment before they went private?

    Quoting PanHAM (Reply 5):
    I just take 2 items - the € 800 Million Lufthansa pension fund - LH was government owned and had a public service pension scheme vs. the regular pension scheme in which private companies pay onthly as do the employees.

    Going public means that the privatized company cannot assume the liabilities of the old company, otherwise the IPO would not have been accepted. The pension fund is a liability of the previous owner, not the new company.,

    So does that mean that the current carrier benefits by not paying for or having to maintain the pension?

    Quoting boeing773W (Reply 3):

    They've engaged in a campaign of trying to portray other airlines in a bad light for receiving various funds/bailouts, which according to EK amount to subsidies. Are and are they trying to use that as an excuse for something?!?

    Like Boeing complaining about RLI and the EU complaining about NASA and the US Military, truly, what is the difference?
    What's good for the goose is ..............


    User currently offlineRyanairGuru From Australia, joined Oct 2006, 5939 posts, RR: 5
    Reply 51, posted (2 years 7 months 3 weeks 4 days 5 hours ago) and read 13618 times:

    Quoting lightsaber (Reply 35):
    QR and EY certainly couldn't put out a similar document. I wonder if some of this is EK going on the offensive against their two stronger regional competitors.

    I hadn't thought of that, but you might be right. As well as a direct mud sling at the extra-regional operators who have made wild allegations about EK, it could also be a finger to EY and QR. Especially with vague references to how some airlines in the region are subsidised...

    Quoting ElPistolero (Reply 38):
    Is respect for law anti-business by nature?

    Not at all. I've heard it argued that one of the reasons for the economic rise of the United Kingdom and then the United States was the strength of the common law systems in those countries which ensured an independent legal system which was conducive for business free from government interference.

    Quoting ElPistolero (Reply 38):
    All societies are based on the rule of law. How the law is promulgated (democratically or by decree) is another matter. I prefer the democratic ideal, but there's no denying that the despots have improved the lot of their people too.

    I agree. "Rule of law" has become one of those liberal buzzwords, which when boiled down means absolutely nothing. Every country is ruled by law, it's just what the law is that changes! It would seem that people in the west have filled the term with an inherently euro-centric concept of what the "law" should be.

    Quoting zeke (Reply 40):
    QF were recently tanking about setting up a premium airline in Asia, one of the main factors driving this from what I understand is the very expensive Australian taxation system and workplace laws. They could employ a person with the same after tax pay in Singapore for approximately 30-40 percent of the package in Australia.

    Good point. At the end of the day, Australia is one of the most expensive places in the world to employ people. Note, that isn't referring to take home pay (although that is high) but rather the cost of employing an individual. There are a lot of complex and inter-relating reasons for this, but the simple fact is that it is cheaper to employ people in Asia or the Middle East. I'm sure there a similar situations in Germany, Canada etc. This isn't EK or SQ or anyone elses fault. If it's anyones' it is the Australian/German/etc Governments. As an Australian worker I appreciate my superannuation, generous overtime/weekend loading, the highest leave entitlement in the world, the very tough OH&S laws ... but at the same time I fully recognise that they make our country significantly less productive and competitive.



    Worked Hard, Flew Right
    User currently offlinePrinair From United States of America, joined Dec 1999, 744 posts, RR: 2
    Reply 52, posted (2 years 7 months 3 weeks 4 days 5 hours ago) and read 13379 times:

    The solution is simple... All other airlines should just lobby their governments to either limit or cancel Emirates landing rights in their respective countries. After all as luxurious as DXB is, it is a piece of overrated real estate in the desert.


    PRINAIR : Puerto Rico International Airlines
    User currently offlinecmf From , joined Dec 1969, posts, RR:
    Reply 53, posted (2 years 7 months 3 weeks 4 days 4 hours ago) and read 13084 times:

    Quoting rogercamel (Reply 13):
    What I was trying to say is that even though EK may not receive subsidies, it does have business advantages against other carriers. Be that through the tax policies.

    Sure they have advantages. But so do their competitors. It isn't a one way street.

    Quoting rogercamel (Reply 13):
    My thoughts too. If the investors are government owned companies they will take a different view in relation to expected returns and approach for risk.

    A lot of government owned companies are run exactly like private companies. Some with requirement on return that would make most privately owned companies gasp.

    Quoting airbazar (Reply 15):
    Even if they're better than the rest, they clearly don't understand the ingrained menthality in the West: Never trust a government entity.
    Quoting connies4ever (Reply 16):
    I'd say more than likely an ingrained mentality in the USA, not the West.

    connies4ever is right, Anyone having problems trusting a government run entity should have nightmares about what goes on in private companies.

    As to Dubai. They may be called and technically be a government but having been involved in two companies where the Dubai Royal family had invested, they are tougher than most private investors.

    Quoting ElPistolero (Reply 17):
    Oh goody. The perfect cure for a sore-throat ravaged Saturday morning.  

    Great Post   

    Quoting RyanairGuru (Reply 25):
    The only reason I can think of was that Abu Dhabi didn't want the WTO and IMF poking around in the UAE

    Knowing a bit about the region would make you understand why it is unacceptable for Abu Dhabi to let Dubai falter. Not easy to explain but the consequences from failing to pay a bill is extremely difficult to understand if you have not spent time there.

    Quoting solarflyer22 (Reply 46):
    1) Its the Persian Gulf not the "Arabian Gulf". Nice try Shiek. lol

    It most certainly isn't the Persian Gulf when your inside GCC.

    Quoting solarflyer22 (Reply 46):
    I think they do get some government cheese.

    I'm convinced it is the other way around. Dubai require them to deliver cheese.

    Quoting PanHAM (Reply 34):
    I do not propose anything. I just made a statement to show why a country that is ruled by decret has some "advantages"

    As all other countries they have their set of advantages AND their set of challenges.

    Quoting mdavies06 (Reply 49):
    But I would rather think they are brothers and rivals at the same time at a high level.


      


    User currently onlinemayor From United States of America, joined Mar 2008, 10654 posts, RR: 14
    Reply 54, posted (2 years 7 months 3 weeks 4 days 1 hour ago) and read 12317 times:

    Quoting rogercamel (Reply 7):
    You can tailor virtually any set of statistics to meet your own aims.

    As they say, there are lies, damn lies and statistics.  



    "A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
    User currently onlinePanHAM From Germany, joined May 2005, 9739 posts, RR: 31
    Reply 55, posted (2 years 7 months 3 weeks 4 days ago) and read 11926 times:

    Quoting par13del (Reply 50):
    So does that mean that the current carrier benefits by not paying for or having to maintain the pension?

    No, of course not. LH pays, like any German company that employs, regurlarly and motnhly into the pension fund. Right now it is 19,6% of the income which is 100% earned in the company. Split up about 50/50 between employer and employee. Example - if the employee has a gross income of € 3000,00 p month LH has to pay € 288,00 on top, plus similar shares for health, job los insurance etc. .

    When LH was state owned, they had the public service scheme which is not competetive for private companies. The 800 Million € or whatever the figure was to buy the company out of this future obligation and make it fit for the IPO.

    Quoting mayor (Reply 54):
    As they say, there are lies, damn lies and statistics.

    ...and never trust a statistic which you haven't faked yourself.


    well, yes, but it was said before, EK is owned by the same cororation that owns the Civil Avciation Board, the airport, the handling companies and the country itself. That is a real advantage.

    In contrast, LH is treated by the government like a cash cow they can milk as they please with aviation tax, CO² tax, in addition it makes life for airlines not easier by cowardly backing down to NIMBYs and closing the main hubs between 11pm and 5 am . That is a real challenge.

    Quoting cmf (Reply 53):
    As all other countries they have their set of advantages AND their set of challenges.



    Es saugt und blaest der Heinzelmann wo Mutti sonst nur blasen kann. Frueher war mehr Lametta.
    User currently offlinegigneil From United States of America, joined Nov 2002, 16347 posts, RR: 85
    Reply 56, posted (2 years 7 months 3 weeks 4 days ago) and read 11905 times:

    Quoting boeing773W (Reply 3):
    Also, with respect, but a quote "from their auditors PWC" means nothing. Of course their own auditors will confirm EK's story. An auditor's report is effectively an opinion and nothing more. Most aren't worth the paper they're written on frankly (think back to Arthur Andersen's "audits" of Enron and you get the picture).

    Are you 5?

    Auditors are WELL regulated in this country now, and what auditors say are the facts are the only way to check them.

    Quoting airbazar (Reply 15):
    And that's exactly what EK is, a government entity.

    Prove it.

    Quoting ElPistolero (Reply 17):
    I haven't even read the article yet, but I see the same old objections are all over the place.

    From where I stand, this is a biased piece of paper.

    Thank you for your brilliant insight, having not read the content material you're attacking.

    NS


    User currently offlineElPistolero From Canada, joined Feb 2012, 1039 posts, RR: 4
    Reply 57, posted (2 years 7 months 3 weeks 3 days 23 hours ago) and read 11680 times:

    Quoting connies4ever (Reply 48):
    It would seem that ACPA are as active on parliament Hill as AC may be. So who is really the active lobbyist ?

    The link I've given should list the lobbying under Calin Rovinescu (which includes several executives including Duncan Dee and the governmental relations fellow.

    Quoting connies4ever (Reply 48):
    There is no doubt, given AC's many international connections, that they will have a frequent and on-going relationship with the government of the day. This does not mean, in and of it self, that they are "running to the government".

    Which would make sense, except when you click on each link, it shows what the lobbying is about. Some of them show "pension", others show "labor". I think we both know that AC executives are not interested in the general state of pension in Canada.

    Quoting Prinair (Reply 52):
    The solution is simple... All other airlines should just lobby their governments to either limit or cancel Emirates landing rights in their respective countries. After all as luxurious as DXB is, it is a piece of overrated real estate in the desert.

    Ban EK and another one will show up. The model has been set, and it is working. TK is planning on emulating the EK model, and over time it might well succeed. Thing with good ideas is - they survive, till they're replaced by better ideas.The UAE and EK model has, in fact, worked to achieve the goals they wanted to. Others will pick up where they left off. Don't forget the EK model itself is based on the SQ and LH model. But where SQ focused on premium travel, and LH ....decided mediocrity was a viable idea, EK has turned to low-yield traffic.

    Quoting connies4ever (Reply 48):
    If this page would load, I could read it. Absent that, I can't make a comment.

    Then this might work.
    http://www.cbc.ca/news/business/stor.../2012/03/09/air-canada-harper.html

    Or this,

    http://www2.macleans.ca/2012/03/09/w...ene-in-air-canadas-labour-dispute/

    Either which way, it is up to you to make up your mind. The same applies to the senate committee hearings.

    "Senator Zimmer: I have a brief question picking up on your comment about the United Arab Emirates.

    Your presentation was excellent — candid, precise and to the point. I agree with you that the U.A. Emirates should have been allowed but they were not. Could you expand further on the reasons? Was it Canadian about competition? Do you have any idea of the reasons?

    Mr. Chandra: From what I can tell, I would imagine there is plenty of lobbying going on behind the scenes, essentially from Air Canada because they are worried about foreign competition. That is the only conceivable reason. Frankly, that decision did not get us anything. It did not provide us with the competition that we badly need, and it ended up reducing our access to airports in the Middle East. They slapped visa requirements on Canadian travellers to the UAE. I do not see any benefits to us from that. I can see only a downside from that decision. The only possible benefit would be to the agents that did not have to see more competition from it. I would imagine there is some of that going on, but it is hard to say directly."

    http://www.parl.gc.ca/content/sen/committee/411/TRCM/07EVA-49376-E.HTM

    "Mr. Howard:

    We hear stories about Emirates being state-subsidized. There are many airlines around the world that are state-subsidized; New Zealand is one. We have agreements with New Zealand. I dare say Air Canada has had some involvement with the government over the years as well."

    http://www.parl.gc.ca/content/sen/committee/411/TRCM/49434-E.HTM

    "Senator Mercer (to Duncan Dee): It seems to me that for every action there is a reaction. You took an action, and the reaction was that someone filled the void.

    Senator Cochrane talked about this, and Senator Dawson referred to making representations to government. I cannot let the opportunity pass that your either outright or quiet opposition to the expansion of Emirates access to Canadian airspace for flights to and from Dubai seems short-sighted, as far as I am concerned. It is short-sighted from an industry point of view. You want to grow the industry, while opposing them expanding theirs. You will get the same push-back from other people elsewhere.

    I would also draw your attention to the side effect that that kind of opposition had on our military operation in Afghanistan, by losing access to Camp Mirage. The people in Dubai were saying it was directly related to the negotiations of airspace and air travel for their airlines.

    This is serious business. This has cost the government — it does not matter which government it is — and Canadians millions, if not billions, of dollars and created some serious problems for our military operations while we were winding down our operations in Afghanistan. I urge you to think about that, about what the consequences will be of some of these oppositions."

    http://www.parl.gc.ca/content/sen/committee/411/TRCM/01EVB-49064-E.HTM

    I am not going to keep doing your research for you.

    All I will say is that there is a lot of mythology being propagated by AC and other airlines. I prefer to view the EK situation from a Canadian consumer's angle. Most Canadians (and several a.netters) prefer to view it from the airlines angle. Ultimately, however, propagating myths and donning the blinders of ideology does no one any favors.

    Quoting Viscount724 (Reply 47):
    Also, I doubt the document mentions that unions are illegal in the UAE, or mentions how much easier it is to operate at a hub where the same entity (the government) not only owns the airline but also the airport, the ground handling agent, fuel supplier, and serves as the regulatory authority (equivalent of the US FAA and DOT combined).
    Quoting PanHAM (Reply 55):
    well, yes, but it was said before, EK is owned by the same cororation that owns the Civil Avciation Board, the airport, the handling companies and the country itself. That is a real advantage.

    Not really sure what to make of that. The same thing applies to Air India and Air China. You only have to look at Air India to realize how wrong it can all go.

    Quoting PanHAM (Reply 55):
    In contrast, LH is treated by the government like a cash cow they can milk as they please with aviation tax, CO² tax, in addition it makes life for airlines not easier by cowardly backing down to NIMBYs and closing the main hubs between 11pm and 5 am . That is a real challenge.

    This is the unfortunate reality. The only hope is that the EK threat/idea spur politicians to change their view of airlines and start treating them as strategic assets.

    Quoting gigneil (Reply 56):
    Thank you for your brilliant insight, having not read the content material you're attacking.

    Yes and no. I did read the paper after typing the first couple of lines, jsut to make sure I wasnt putting my foot in my mouth. Still ...did precisely that by not removing the line. Ooops. EK has released a similar paper before - back in 2010 - in Canada, that was not exactly unbaised.


    User currently onlinePanHAM From Germany, joined May 2005, 9739 posts, RR: 31
    Reply 58, posted (2 years 7 months 3 weeks 3 days 23 hours ago) and read 11421 times:

    Quoting ElPistolero (Reply 57):
    Not really sure what to make of that. The same thing applies to Air India and Air China. You only have to look at Air India to realize how wrong it can all go.

    yes., but neither AI nor China are the topic here. Of course, the recent bail out of AI was a slap into the face of all privately owned carriers in India. The difference between India and the UAE is that the latter is efficiently run.

    Quoting ElPistolero (Reply 57):
    This is the unfortunate reality. The only hope is that the EK threat/idea spur politicians to change their view of airlines and start treating them as strategic assets.

    ...and the sun will rise in th west tomorrow morning.



    Es saugt und blaest der Heinzelmann wo Mutti sonst nur blasen kann. Frueher war mehr Lametta.
    User currently offlineaeroblogger From India, joined exactly 3 years ago today! , 1363 posts, RR: 0
    Reply 59, posted (2 years 7 months 3 weeks 3 days 21 hours ago) and read 11031 times:

    Quoting PanHAM (Reply 58):

    yes., but neither AI nor China are the topic here. Of course, the recent bail out of AI was a slap into the face of all privately owned carriers in India. The difference between India and the UAE is that the latter is efficiently run.

    Not quite. It was a slap in the face of the taxpayer, certainly, but of the private airlines? Not really. 9W has been pulling the strings in the Ministry of Civil Aviation for the last decade or so now - MoCA has a very comfortable position now. Loot the public, follow 9W's policy requests, blame AI. Very convenient for all.

    Quoting ElPistolero (Reply 17):

    Why does it have to be privately owneed? WHy does it have to have public controls? There are many large family owned organizations that are doing very well. Why bring external shareholders in?

    The rest of your post is about public policy. If a state decrees that something is in its strategic interest, it moves forward with it. China's astronomical growth is based on this simple rule. Dubai recognized the potential for tourism and the hub system and ran with it, in much the same way as China had little regard for peasants when it took over land and turned them into sprawling industrial zones. While the observance of legal processes is great and all, every country is entitled to do what it thinks is best for its people (we call it sovereignty). The UAE has followed a tourism and hub airport model (as well as a financial hub and shipping hub model) that has proven to be very successful. By contrast, Germany taxes like it is going out of style, though to be fair to Germany, they've never really aspired to be a tourist destination in the same league as UAE, France, or more recently, Turkey.

    China too builds factories faster than anyone else. Factories that build, among other things, Airbus aircraft and other components for airlines like LH.

    Is it unfair? No. No one is stopping Germany from adopting the same policy. Germany is choosing not to. If I insist on wearing uncomfortable shoes, can I blame you for wearing comfortable shoes and insist that you change them?

            

    Countries around the world are free to embrace whatever policies they feel are best for their people. However, in this day and age, they can't then go and complain that other countries are advantaged against them.



    Airports 2012: IXE HYD DEL BLR BOM CCU KNU KTM BKK SIN ICN LAX BUR SFO PHX IAH ORD EWR PHL PVD BOS FRA MUC IST
    User currently onlinePanHAM From Germany, joined May 2005, 9739 posts, RR: 31
    Reply 60, posted (2 years 7 months 3 weeks 3 days 20 hours ago) and read 11009 times:

    Quoting aeroblogger (Reply 59):
    Countries around the world are free to embrace whatever policies they feel are best for their people. However, in this day and age, they can't then go and complain that other countries are advantaged against them.

    Not quite, there are laws, there are agreements on international trade, there is the Chicago convention, the EU countries have to come to majority decisions, regardless what the single member country wants, it cannot, to take this example, subsidize its local airline. The EU will take over the bi-lateral air agreements with third countries in the near future and that will be a whole new ballgame. Then - think about the term "fair trade" , it's not as easy as you think it may be.



    Es saugt und blaest der Heinzelmann wo Mutti sonst nur blasen kann. Frueher war mehr Lametta.
    User currently offlineAngMoh From Singapore, joined Nov 2011, 504 posts, RR: 0
    Reply 61, posted (2 years 7 months 3 weeks 3 days 20 hours ago) and read 10885 times:

    Quoting PanHAM (Reply 60):
    Not quite, there are laws, there are agreements on international trade, there is the Chicago convention, the EU countries have to come to majority decisions, regardless what the single member country wants, it cannot, to take this example, subsidize its local airline. The EU will take over the bi-lateral air agreements with third countries in the near future and that will be a whole new ballgame. Then - think about the term "fair trade" , it's not as easy as you think it may be.

    These international agreements are just a tiny aspect of the world economy. Effectively, they are irrelevant. There is no international law forcing UEA to have the same social welfare as Germany. There is no international law preventing farmers from being evicted from their land overnight in China while it takes 25 years to do the same in Narita. Same as that US airlines can restructure and write of debt under chapter 11 and restart profitably while EU airlines like Malev had to shut down under EU rules.
    Overall economic policy and how decisive you are in executing these policies have a much bigger impact than anything else.


    User currently offlineairproxx From France, joined Jun 2008, 641 posts, RR: 1
    Reply 62, posted (2 years 7 months 3 weeks 3 days 19 hours ago) and read 10872 times:

    Quoting SInGAPORE_AIR (Thread starter):
    I was sent this document today which has been prepared by Emirates:
    Quoting boeing773W (Reply 3):

    It was prepared by Emirates. What else did you expect them to say?!?

    They've engaged in a campaign of trying to portray other airlines in a bad light for receiving various funds/bailouts, which according to EK amount to subsidies. Are and are they trying to use that as an excuse for something?!?

    Also, with respect, but a quote "from their auditors PWC" means nothing. Of course their own auditors will confirm EK's story. An auditor's report is effectively an opinion and nothing more. Most aren't worth the paper they're written on frankly (think back to Arthur Andersen's "audits" of Enron and you get the picture).

    This whole thing from EK reminds me a bit of the old saying 'Do as I say, not as I do'.
    Quoting rogercamel (Reply 7):

    You can tailor virtually any set of statistics to meet your own aims.

            


    EK is even more guilty to my eyes, issuing such a bunch of crap written by their own hands!
    Looks like a fake trial to me, with some uncheckable figures that, curiously, all go in EK way!
    Good publicity, for who loves to believe this, but to me, it just make me think that EK is in bad need to justify themselves...



    If you can meet with triumph and disaster, and treat those two impostors just the same
    User currently offlineSInGAPORE_AIR From United Kingdom, joined Nov 2000, 13745 posts, RR: 19
    Reply 63, posted (2 years 7 months 3 weeks 3 days 19 hours ago) and read 10859 times:

    Quoting airproxx (Reply 62):
    EK is even more guilty to my eyes, issuing such a bunch of crap written by their own hands!

    Would you be so kind as to provide some examples of erroneous "crap" produced by Emirates ?



    Anyone can fly, only the best Soar.
    User currently offlineconnies4ever From Canada, joined Feb 2006, 4066 posts, RR: 13
    Reply 64, posted (2 years 7 months 3 weeks 3 days 13 hours ago) and read 10516 times:

    Quoting ElPistolero (Reply 57):
    Quoting connies4ever (Reply 48):
    It would seem that ACPA are as active on parliament Hill as AC may be. So who is really the active lobbyist ?

    The link I've given should list the lobbying under Calin Rovinescu (which includes several executives including Duncan Dee and the governmental relations fellow.

    It will take a little time to go through all this.
    a) I have to work for a living, and
    b) I'm single and dating. It takes time.



    Nostalgia isn't what it used to be.
    User currently offlineairproxx From France, joined Jun 2008, 641 posts, RR: 1
    Reply 65, posted (2 years 7 months 3 weeks 3 days 13 hours ago) and read 10495 times:

    Quoting SInGAPORE_AIR (Reply 63):
    Would you be so kind as to provide some examples of erroneous "crap" produced by Emirates ?

    The actual question is: Can you prove that points of the report are true? Can you prove that the whole report is not biased?



    If you can meet with triumph and disaster, and treat those two impostors just the same
    User currently offlineaeroblogger From India, joined exactly 3 years ago today! , 1363 posts, RR: 0
    Reply 66, posted (2 years 7 months 3 weeks 3 days 13 hours ago) and read 10457 times:

    Quoting airproxx (Reply 65):

    The actual question is: Can you prove that points of the report are true? Can you prove that the whole report is not biased?

    Of course the report is biased. Every report that has ever been prepared on this topic is biased. Every report that will be prepared on this topic in the future will be biased.

    That doesn't make it any less valid - an informed reader has to go and look at the reports out there, and form their own opinion.



    Airports 2012: IXE HYD DEL BLR BOM CCU KNU KTM BKK SIN ICN LAX BUR SFO PHX IAH ORD EWR PHL PVD BOS FRA MUC IST
    User currently offlineairbazar From United States of America, joined Sep 2003, 8656 posts, RR: 10
    Reply 67, posted (2 years 7 months 3 weeks 3 days 9 hours ago) and read 10225 times:

    Quoting connies4ever (Reply 16):
    I'd say more than likely an ingrained mentality in the USA, not the West. Thanks to the GOP and Tea Party, in part.

    Sorry but I'm European and that is a sentiment shared by many in Europe, especially in these days of bad economic times. Ask the Greeks, the Italians, the Portuguese, the Spaniards or even the French if they fully trust their governments and I suspect the majority will say no. Sweeping statement perhaps but I think it depicts very well the sentiment in the countries EK is trying to attack with this document.


    User currently offlineElPistolero From Canada, joined Feb 2012, 1039 posts, RR: 4
    Reply 68, posted (2 years 7 months 3 weeks 3 days 5 hours ago) and read 9972 times:

    Quoting connies4ever (Reply 64):
    It will take a little time to go through all this.

    If you ever lose a weekend to the flu, like I just did, reading through it all is not the worst way to kill the few neo-citran powered hours of relief.  

    I had no idea about the senate hearings until earlier this week, and I must say that as an aviation enthusiast, it makes for great reading.

    Quoting airproxx (Reply 65):
    The actual question is: Can you prove that points of the report are true? Can you prove that the whole report is not biased?

    No one believes the report is not biased. It is approached from a certain angle to reflect poorly on EKs competitors. Lest we forget, it was LH, AC et al that started the mudslinging, not EK. They fired the first shots. EK has responded. The fact that LH, AC etc resorted to taking potshots and skewing facts (impact on Australia, for example, which is openly contradicted by Canadian provincial governments) in the first place, should not be forgotten. If EK is issuing baised notes, it is in response to equally baised notes from AC etc.

    Quoting airproxx (Reply 62):
    Looks like a fake trial to me, with some uncheckable figures that, curiously, all go in EK way!

    You should read the AC piece (linked elsewhere on this thread). Its equally, if not more, absurd.

    Quoting PanHAM (Reply 60):
    Not quite, there are laws, there are agreements on international trade, there is the Chicago convention, the EU countries have to come to majority decisions, regardless what the single member country wants, it cannot, to take this example, subsidize its local airline. The EU will take over the bi-lateral air agreements with third countries in the near future and that will be a whole new ballgame. Then - think about the term "fair trade" , it's not as easy as you think it may be.

    Fair trade is a nice expression, but one has to question how much it applies in today's world. There is very little 'fair' about the West's trade with India or China (courtesy of exchange rate manipulation and lax labor laws etc), but these are going to change at their own pace, and the level of trade is not going to slow down till they do.

    I look forward to seeing the EU negotiate airline agreements. It should be interesting. Their last foray into aviation - the EU carbon credit scheme - was very ...interesting.

    Quoting PanHAM (Reply 58):
    yes., but neither AI nor China are the topic here. Of course, the recent bail out of AI was a slap into the face of all privately owned carriers in India. The difference between India and the UAE is that the latter is efficiently run.

    Like I've said several times, if you are going to apply a certain set of criteria, apply it equally, and demand the same punishment equally. I fail to see why EK should be criticized when other nations are doing the same thing. This kind of select criticism is very questionable, especially when its motivated solely by frustration at being outdone by a competitor.

    I agree though, the UAE has done a much better job than AI. But they've only gone and applied the same concept.

    Quoting PanHAM (Reply 58):
    ...and the sun will rise in th west tomorrow morning.

    Which is the unfortunate reality of NIMBY-ism. Call it democracy or what you will, but somebody has to keep an eye on the bigger picture. If a democracy isn't doing that - if it isn't realizing its hurting itself by pandering to the interests of a few at the cost of the many, then it is that country's own fault. Not the fault of a dictator elswhere.


    User currently offlineSKY1 From Spain, joined Apr 2006, 879 posts, RR: 4
    Reply 69, posted (2 years 7 months 3 weeks 3 days 5 hours ago) and read 9939 times:

    Quoting airbazar (Reply 67):
    Sorry but I'm European and that is a sentiment shared by many in Europe, especially in these days of bad economic times. Ask the Greeks, the Italians, the Portuguese, the Spaniards or even the French if they fully trust their governments and I suspect the majority will say no.

    There are differences between politicians from the executive and other State institutions (the judiciary, for example) If we do not trust in any institution when we enjoy in our countries a Rule of Law we'll be lost.

    But of course the UAE is not a democracy so your previous statement...

    Quoting airbazar (Reply 15):
    Never trust a government entity. And that's exactly what EK is, a government entity.

    ...is right when speaking about a government entity from a non-democratic State.



    Time flies! Enjoy life!
    User currently offlineRyanairGuru From Australia, joined Oct 2006, 5939 posts, RR: 5
    Reply 70, posted (2 years 7 months 3 weeks 3 days 3 hours ago) and read 9879 times:

    Quoting airproxx (Reply 65):

    The actual question is: Can you prove that points of the report are true?

    Guilty to proven innocent eh?



    I tried to read the Air Canada article, and if the Emirates one is "biased" then the AC one is ...

    I particularly love this quote:

    "A recent study by Arthur D. Little estimates that Emirates Airlines pays 48% less on labor than European airlines due in large part to the lack of any income taxes in Dubai and favorable labor rules which allow for the importation of guest workers from overseas. The same study estimates that Dubai Airport charges 78% lower landing and other fees for an Airbus 340-300 than other international airports such as Frankfurt."

    So the fact that income taxes and airport charges are lower in Dubai than Germany should mean that we should restrict access for EK et al.

    By the same methodology, I'm looking forward to AC campaigning to keep Korean, Irish and Mexican airlines out of Canada since those countries have significantly lower personal income tax levels   

    Quoting ElPistolero (Reply 68):
    etc resorted to taking potshots and skewing facts (impact on Australia, for example, which is openly contradicted by Canadian provincial governments) in the first place, should not be forgotten

    This somewhat infuriated me. If AC want to spew crap about Canada, fine go ahead. But to make up false statements about other countries is too far.

    Firstly, lets start with the knowledge that Europe-Australia is one of the most low-yielding markets in the world.

    The article states that in 2000 QF, BA, AZ, OS and KL flew to Australia. Fine. It then insinuates that the reason three don't do so now is EK. Let's not loose sight of the fact that AZ, OS and KL were all teetering on the point of bankruptcy at the time or shortly afterwards and that they would cut what must have been a loss making/marginal at best route is totally unsurprising.

    QF cut FCO because it was entirely VFR traffic with next to no premium traffic. The decision was based on the reality of the market (coupled with QF's high cost base making them more dependent on premium traffic) and not on EK. QF cut MAN for similar reasons, but also it had BA to feed it at LHR. Let's not loose sight of the fact that CX cut MAN for similar reasons at about the same time as QF.

    And this leads to the real reason for the retreat of the European legacies form Australia: alliances. I can go to lufthansa.com, flysas.com, finnair.com etc and book a flight from SYD to LHR. It's just that the first leg will be on SQ or TG or CX. On such a very long, very thin route which requires a stopover anyway it made absolute sense to terminate flights in BKK or SIN and connect from there. This was the sort of synergy alliances brought.

    And, of course, the article does not even mention the real "villain" on the Kangaroo Route: SQ (and to a lessor extent CX, TG etc). Most of the damage to the prospects of the legacies had been done long before EK entered Australia (2002?).

    Even more tenuously, the article somehow draws a link between EK and the Australian Government refusing to approve additional Trans-Pacific flights. Note to those who wrote the article: Australia has an open skies agreement with the USA! The article, however, ignores this and says that the Australian Government is restricting access to other airlines on TPAC routes in order to protect the fledgling V Australia. I don't buy that at all, but even if it was true why would the Australian Government use that as an excuse to not increase bilateral rights with Canada (as the argument suggests)? To protect VA' and QF's own flights to Canada???



    Worked Hard, Flew Right
    User currently offlineElPistolero From Canada, joined Feb 2012, 1039 posts, RR: 4
    Reply 71, posted (2 years 7 months 3 weeks 3 days 3 hours ago) and read 9836 times:

    Quoting RyanairGuru (Reply 70):
    "A recent study by Arthur D. Little estimates that Emirates Airlines pays 48% less on labor than European airlines due in large part to the lack of any income taxes in Dubai and favorable labor rules which allow for the importation of guest workers from overseas. The same study estimates that Dubai Airport charges 78% lower landing and other fees for an Airbus 340-300 than other international airports such as Frankfurt."

    Imagine! FRA has no control over the landing charges.

    Quoting RyanairGuru (Reply 70):
    And, of course, the article does not even mention the real "villain" on the Kangaroo Route: SQ (and to a lessor extent CX, TG etc). Most of the damage to the prospects of the legacies had been done long before EK entered Australia (2002?).

    Shhhh. Don't let facts get in the way of AC's mythology.

    My facetiousness apart, the only thing that shocks me is how most Canadians on a.net buy and parrot these lines. I want to say that they know no better, but the lack of critical thought involving this subject in Canada continues to amaze me. There is a very real mythology being peddled - one that, unfortunately, is being treated as fact.

    About time somebody took a hammer to it and saw what substance it has - iron or hot air.

    Quoting RyanairGuru (Reply 70):
    I don't buy that at all, but even if it was true why would the Australian Government use that as an excuse to not increase bilateral rights with Canada (as the argument suggests)? To protect VA' and QF's own flights to Canada???

    This is an old story among the AC folk. Personally, I don't know what the truth behind it is, but now that its in the open on a thread that relates to EK, as opposed to AC, lets hear it.

    Anyone know what the story behind this is?.

    I should add - great post. It certainly raises questions about what many Canadian a.netters have been treating as fact.

    [Edited 2012-04-29 20:06:43]

    User currently offlineAirIndia From United Arab Emirates, joined Jan 2001, 1655 posts, RR: 1
    Reply 72, posted (2 years 7 months 3 weeks 3 days 1 hour ago) and read 9694 times:

    Quoting ElPistolero (Reply 71):
    It certainly raises questions about what many Canadian a.netters have been treating as fact.

    If yuo repeat a lie over and over again, it becomes the truth. And that is what most Canadian a.netters have been subject to. It takes too much time and effort apparantly, to get out of the comfort zone and see things from another perspective.


    User currently offlineRyanairGuru From Australia, joined Oct 2006, 5939 posts, RR: 5
    Reply 73, posted (2 years 7 months 3 weeks 2 days 22 hours ago) and read 9542 times:

    Quoting ElPistolero (Reply 71):
    I don't know what the truth behind it is

    I'm thinking very little, not least because no Australian airlines fly to Canada!

    Admittedly we can connect in LAX, but personally I would go AC or NZ. And that's speaking as a QF status flyer.

    Also I think that it overstates the lobbying power of the Australian airlines, and VA in particular. VAH is still very much #2. To suggest that they have sufficient ears in Canberra to prevent AC from increasing flights is somewhat absurd.

    Firstly, AC increasing flights from YVR would only have minimal impact on their operations out of LAX. A significant amount of traffic LAX-Australia is O&D California (haven't got the figures to hand), with the USA making up virtually all the rest. I once looked what the connections were like LAX-YYC on DL (to connect with VA) and they were diabolical. Anybody they pick up on that route was definitely at the bottom wrung of the ladder in terms of yield.

    Secondly, if QF can't block open skies with the USA then why anyone would think that VA can block increased bilaterals with Canada is beyond me. The QF/UA duopoly on USA-Australia was very comfortable for the airlines (but not at all for consumers). Fares were sky high, with the yields to match. LAX was QF's cash cow for many years. Then comes along open skies and DL and VA rush in and flood the market. Unfortunately 2008/9 wasn't the best time for this sort of over-capacity given the GFC and fares crashed to under $1000 ($850 on DL was particularly memorable). Needless to say QF's cash cow become a bottomless pit almost overnight. While the market has normalised and all 4 airlines are now profitable on these routes, yields are definitely not what they once were. I've heard it joked that the former QF CEO Geoff Dixon spent more time on Capital Hill than he did in Mascot (QF's HQ) and therefore if QF can't force government policy over bilaterals, then VAH has no hope.



    [Edited 2012-04-30 01:00:41]



    [Edited 2012-04-30 01:01:11]

    [Edited 2012-04-30 01:02:38]

    [Edited 2012-04-30 01:04:51]


    Worked Hard, Flew Right
    User currently offlinezeke From Hong Kong, joined Dec 2006, 9229 posts, RR: 76
    Reply 74, posted (2 years 7 months 3 weeks 2 days 11 hours ago) and read 9128 times:

    Quoting solarflyer22 (Reply 46):
    Bottom line - they pay no corporate income tax even when profitable.

    They pay the appropriate taxes and changes in any country they operate from. They have subsidiaries worldwide, they do pay tax.

    Quoting solarflyer22 (Reply 46):
    They say they have to pay more for expatriate pilots (~30%) but turn around and graph labor costs about half that of BA or UA.

    You are trying to portray them as doing something illegal. They are paying the full tax rate in the respective jurisdiction, if they tax rate is 0% that is not their fault.

    This has been going on for years, why do you think so many banks and investment companies are based in tax effective areas ? Why are so many private jets and yachts based in tax effective places ?

    Quoting Viscount724 (Reply 47):

    And their UAE-based staff (which must account for 98% of the total) pay no personal income taxes.

    What you fail to say, that is in line with the local laws, they are not getting a subsidy from the government, any airline operating from UAE would be offered the same.

    You are thinking in present tense, they will not remain as they are forever, recent history is littered with countries that had similar models. The local living standard will increase, the cost of operating out of the UAE will increase, and some other airline will then come into play.

    Quoting Viscount724 (Reply 47):
    Also, I doubt the document mentions that unions are illegal in the UAE, or mentions how much easier it is to operate at a hub where the same entity (the government) not only owns the airline but also the airport, the ground handling agent, fuel supplier, and serves as the regulatory authority (equivalent of the US FAA and DOT combined).

    That was exactly what Singapore was for so long.

    Quoting Prinair (Reply 52):
    All other airlines should just lobby their governments to either limit or cancel Emirates landing rights in their respective countries.

    That would be very short signeted IMHO. Governments if they were genuinely interested in improving local employment, would offer EK incentives to operate, and pay taxes in those countries. This is where many governments lost it, they never thought a small airline operating a small number of short or medium haul aircraft would become such a global player. Those governments gave the UAE almost open rights, with nothing in return. Many people thought the same about this little island called singing putting in a huge order (in relative terms) for 747 back in the early 1970s.

    Many countries could have stipulated that in return for more rights, we want x percentage of the cockpit, cabin, and ground staff to be locally employed.

    Quoting ElPistolero (Reply 57):

    Ban EK and another one will show up.

    Yep, agreed.

    Quoting aeroblogger (Reply 66):
    That doesn't make it any less valid - an informed reader has to go and look at the reports out there, and form their own opinion.

    EK does get export subsidies on new aircraft from the EU and the US, but so do other airlines in the US, Europe, and in fact worldwide.
    EK have a fleet that is young, it is more efficient
    EK did not have to inherit old workplace practices
    EK did not have to inherit old unfunded pension funds
    EK main hub is an efficient airport
    EK have employed a lot of edxperienced people from legacy carriers, they have had lower training costs

    Quoting RyanairGuru (Reply 73):
    Firstly, AC increasing flights from YVR would only have minimal impact on their operations out of LAX. A significant amount of traffic LAX-Australia is O&D California (haven't got the figures to hand), with the USA making up virtually all the rest. I once looked what the connections were like LAX-YYC on DL (to connect with VA) and they were diabolical. Anybody they pick up on that route was definitely at the bottom wrung of the ladder in terms of yield.

    Let AC have open rights, the yields across the Pacific are terrible IMHO. Given AC everything they want, I think they are in self destruct mode myself, they are pointing fingers everywhere, however they are not making the significant fundamental internal changes needed to operate in the global economy. Even Westjet is giving them a run for the money domestically, they can hardly blame EK for that.



    We are addicted to our thoughts. We cannot change anything if we cannot change our thinking – Santosh Kalwar
    User currently offlineElPistolero From Canada, joined Feb 2012, 1039 posts, RR: 4
    Reply 75, posted (2 years 7 months 3 weeks 2 days 5 hours ago) and read 8918 times:

    Quoting RyanairGuru (Reply 73):
    econdly, if QF can't block open skies with the USA then why anyone would think that VA can block increased bilaterals with Canada is beyond me. The QF/UA duopoly on USA-Australia was very comfortable for the airlines (but not at all for consumers). Fares were sky high, with the yields to match. LAX was QF's cash cow for many years. Then comes along open skies and DL and VA rush in and flood the market. Unfortunately 2008/9 wasn't the best time for this sort of over-capacity given the GFC and fares crashed to under $1000 ($850 on DL was particularly memorable). Needless to say QF's cash cow become a bottomless pit almost overnight. While the market has normalised and all 4 airlines are now profitable on these routes, yields are definitely not what they once were. I've heard it joked that the former QF CEO Geoff Dixon spent more time on Capital Hill than he did in Mascot (QF's HQ) and therefore if QF can't force government policy over bilaterals, then VAH has no hope.
    Quoting zeke (Reply 74):

    Let AC have open rights, the yields across the Pacific are terrible IMHO. Given AC everything they want, I think they are in self destruct mode myself, they are pointing fingers everywhere, however they are not making the significant fundamental internal changes needed to operate in the global economy. Even Westjet is giving them a run for the money domestically, they can hardly blame EK for that.

    Generally speaking, airfares out of Canada are significantly higher than elsewhere in the developed world (particularly the US). I m pretty sure yield ex-Canada will be much better than yield ex-US. Canada is not known for being a competitive market.

    In fairness, AC is trying to make internal changes. However, relations between management and labor have hit rock bottom (everyone has their own version on who to blame). The ironic part (particularly in light of the Aveos shutdown) is that AC is attacking (and in Aveos' case, destroying) the very jobs that it claimed it would be protecting by keeping EK out. Those jobs are gone, while the employment packages for the remaining jobs are being systematically degraded. And all of this has happened without EK or EY getting one extra frequency in a 2 years.

    Quoting zeke (Reply 74):
    You are trying to portray them as doing something illegal. They are paying the full tax rate in the respective jurisdiction, if they tax rate is 0% that is not their fault.

    A point lost on everyone it seems. Tax is not something one absolutely must apply to everything under the sun (even in a nation with high taxes). It can be discretionary (I can see the shock on German and Canadian faces as I type that). If they choose to tax them, then, well, they shouldn't feel bad if AC and LH stumble around grasping for straws (and people to blame).

    Quoting zeke (Reply 74):
    This has been going on for years, why do you think so many banks and investment companies are based in tax effective areas ? Why are so many private jets and yachts based in tax effective places ?

    Or Switzerland. I wonder what kind of money ends up in Swiss Banks. The Americans, Indians and Chinese - and a few democratic African countries certainly want to know. Should we hold that against LX?

    Quoting zeke (Reply 74):
    This is where many governments lost it, they never thought a small airline operating a small number of short or medium haul aircraft would become such a global player. Those governments gave the UAE almost open rights, with nothing in return. Many people thought the same about this little island called singing putting in a huge order (in relative terms) for 747 back in the early 1970s.

    LH must be wondering why lobbied so heavily for UAE. I can see the attraction - oil prices were going up, oil companies were going in - plenty of premium cabins to be filled and money to be made. That probably worked in the beginning too...till LHs refusal to improve its offering gradually chipped its lead away. I remember EK becoming the first airline to offer PTVs in Y in the mid 90s - almost 10 years before LH even considered it.

    Reading about LH in India (pulling out of HYD, Kolkotta, doing very badly in Chennai) and BKK, I can't help but feel that EK has pounced on their mismanagement and pulled the rug out from under them in those two markets.


    User currently offlineViscount724 From Switzerland, joined Oct 2006, 25999 posts, RR: 22
    Reply 76, posted (2 years 7 months 3 weeks 2 days 5 hours ago) and read 8888 times:

    Quoting ElPistolero (Reply 75):
    Generally speaking, airfares out of Canada are significantly higher than elsewhere in the developed world (particularly the US). I m pretty sure yield ex-Canada will be much better than yield ex-US. Canada is not known for being a competitive market.

    How can you say that Canada isn't a competitive market internationally when you look at the number of airlines operating international services, especially in relation to the population of only 34 million? And most major Canadian cities are very close to the U.S. border so carriers from Canada are also competing with every carrier operating from nearby U.S. gateways.

    If fares were so uncompetitive, everyone would be flying from the U.S. while in fact load factors from Canada are at least as high and often higher than from the U.S. Every flight I've been on betgween Europe and Canada over the past few years has been close to full.

    Many cities in Canada have far more international service in relation to their population than U.S. cities with similar and often much larger populations. Many U.S. cities much larger than YYC/YEG/YOW/YHZ have no international service at all.


    User currently offlinelewis From Greece, joined Jul 1999, 3678 posts, RR: 5
    Reply 77, posted (2 years 7 months 3 weeks 2 days 5 hours ago) and read 8924 times:

    Quoting connies4ever (Reply 24):

    The Arthur Andersen &* Associates comparison is quite valid - Enron was a shell game but AA & A said it was a solid investment. Standard & Poor's rated Goldman Sachs as a solid investment only months before it collapsed. If you think these organisations are not prostituted to the fees they receive, you're smoking something. Of course PWC would say what EK wanted.

    Just because AA&A messed up back then (and so has PWC before btw), it does not mean that it is the rule, rather the exception. And no, when one of the "Big 4" is auditing, they do not necessarily say what their client says, unless it is true based on the evidence gathered, which is quite extensive.


    User currently offlineElPistolero From Canada, joined Feb 2012, 1039 posts, RR: 4
    Reply 78, posted (2 years 7 months 3 weeks 2 days 4 hours ago) and read 8882 times:

    Why answer in my own words when the experts have already testified before the Senate.

    Quoting Viscount724 (Reply 76):
    How can you say that Canada isn't a competitive market internationally when you look at the number of airlines operating international services, especially in relation to the population of only 34 million? And most major Canadian cities are very close to the U.S. border so carriers from Canada are also competing with every carrier operating from nearby U.S. gateways.

    "As I alluded to in my remarks, I think Canada is lagging a bit behind in terms of air policy and creating opportunities for more international carriers to serve Canada. This has to be a balanced process and a balanced negotiation, but to the extent that, for instance, the U.S. has been more aggressive in terms of opening up the U.S. to foreign carriers, they will choose to fly to those gateways as opposed to Canada."

    http://www.parl.gc.ca/content/sen/committee/411/TRCM/08EV-49428-E.HTM

    "The second reason is that airfares from Canadian airports to U.S. and international destinations tend to be higher than for comparable flights from U.S. airports. There are two reasons for this. First, it is generally believed that airports need to pay higher taxes, higher airport improvement fees, and landing fees for operating out of Canadian airports. As I will point out in a minute, this is not necessarily supported by the data. Second, there is considerably less competition on most routes out of Canadian airports, whether for domestic, transporter, or international flights. As a result, the fare difference between flying out of U.S. airports, rather than Canadian ones, can be enormous."

    "The chart shows that the number of per capita miles flown by Canadian residents is less than half of what it is in the U.S. This is not something that is due to the geographic distribution of the population. If anything, that should lead to more Canadians flying, not fewer. There may be a few reasons for this, such as lower interprovincial integration in Canada or perhaps language barriers. My belief is that one very important factor that is likely to be driving this huge disparity between Canadian and U.S. rates of travel is simply the higher airfares we pay in Canada. My belief is that these higher airfares lead Canadians to fly less than our U.S. counterparts and, when we do fly, we pay much more."

    "Mr. Chandra: From what I can tell, I would imagine there is plenty of lobbying going on behind the scenes, essentially from Air Canada because they are worried about foreign competition. That is the only conceivable reason. Frankly, that decision did not get us anything. It did not provide us with the competition that we badly need, and it ended up reducing our access to airports in the Middle East. "

    http://www.parl.gc.ca/content/sen/committee/411/TRCM/07EVA-49376-E.HTM

    •Air Canada v Qantas: IATA CEO and director general Tony Tyler compared Canada with Australia, which has a much more open philosophy. He noted that, in "Australia, a country that ... closely resembles Canada in terms of geography, demographics, resources and other vital statistics ... aviation directly contributes 2.2% of GDP for Canada, and 2.6% for Australia. If we include catalytic benefits through tourism, GDP contribution rises to 2.8% for Canada - but to 6.1% for Australia.

    "Furthermore, although Canada has a population that is approximately 50% larger than Australia and a landmass that is 20% greater, Australia has more air travel: 78 million passengers travel to, from and within Australia, compared to 71 million for Canada. Australia's airlines carried 58 million passengers, compared to 52 million for airlines based in Canada."

    http://www.contractworld.com.au/glob...r-relations-strikes-Lisa-Raitt.php

    "When Canada's Blue Sky Policy was announced, we all thought it would be great. First, we liked the colour better, and it sounded a lot like open skies. However, there is a clause that says the government could decide not to engage in real open skies treaties, and most of the treaties we have negotiated since then are restrictive.

    One of my favourite examples is Panama. Copa Airlines in Panama is the third most profitable airline in the world, and it has indicated that it would like to fly to Canada. We have a treaty with it that allows it unlimited rights to fly to Canada from any airport except Panama City. Name another airport in Panama."

    http://www.parl.gc.ca/Content/SEN/Co...anguage=E&Parl=40&Ses=3&comm_id=19

    I could go on, really, so I ll leave you with a Senator's observation:

    Senator Eaton: We have been hearing a great deal about the lack of competition amongst Canadian airlines and with our open-sky policy.

    http://www.parl.gc.ca/content/sen/committee/411/TRCM/07EVB-49402-E.HTM

    Quoting Viscount724 (Reply 76):
    If fares were so uncompetitive, everyone would be flying from the U.S. while in fact load factors from Canada are at least as high and often higher than from the U.S. Every flight I've been on betgween Europe and Canada over the past few years has been close to full.

    I'll repeat:

    "The chart shows that the number of per capita miles flown by Canadian residents is less than half of what it is in the U.S. This is not something that is due to the geographic distribution of the population. If anything, that should lead to more Canadians flying, not fewer."

    http://www.parl.gc.ca/content/sen/committee/411/TRCM/07EVA-49376-E.HTM

    Wierd. Higher load factors. And yet Canadians travel less than half as much as the Americans. That points to "underserved" market, does it not?

    Quoting Viscount724 (Reply 76):
    Many cities in Canada have far more international service in relation to their population than U.S. cities with similar and often much larger populations. Many U.S. cities much larger than YYC/YEG/YHZ have no international service at all.

    Really? Which ones? nd what are their one-stop options? And how do their one stop prices compare?

    FWIW, I'll just note again that Australia has 7 million more pax annually than Canada. Or 10% more. Despite being 1/3rd smaller in terms of population. And before we point to Canadian bleed to the US, its only around 600,000 annually (7%) of Canada's air traffic. Add the 600,000 (who used the US airports instead of Canadian ones) to 71 million and you get...72 million - still someway behind Australia.

    "If you actually express that in real numbers, more than 600,000 air trips are taken by Canadian residents out of U.S. airports rather than Canadian ones. That is in the last year."

    http://www.parl.gc.ca/content/sen/committee/411/TRCM/07EVA-49376-E.HTM

    I am sure you have good reason for believing what you type, but you're going to have to explain it in a little more detail for it to be convincing.

    [Edited 2012-04-30 19:18:06]

    [Edited 2012-04-30 19:22:03]

    User currently offlineRyanairGuru From Australia, joined Oct 2006, 5939 posts, RR: 5
    Reply 79, posted (2 years 7 months 3 weeks 2 days 3 hours ago) and read 8861 times:

    If we ignore the presence of the USA for a moment, Canada and Australia are very similar countries. Big and empty, with the population centred in a few cities either along the coast or along the border. They are also the two strongest western economies right now. The vast distances between each city and relative lack of transport alternatives (ie HSR) means that flying is the only viable means of transport. Sydney to Melbourne (two relatively "close" cities) is a 10 hour drive. Toronto to Ottawa and Montreal is shorter (~6 hours) but still too long for anyone other than leisure travelers to consider driving.

    If we take ElPisolero's Senate figures, then only 600,000 Canadians fly over the border to connect internationally.

    With that understanding...

    Quoting Viscount724 (Reply 76):
    How can you say that Canada isn't a competitive market internationally when you look at the number of airlines operating international services, especially in relation to the population of only 34 million? And most major Canadian cities are very close to the U.S. border so carriers from Canada are also competing with every carrier operating from nearby U.S. gateways.

    Canada is not competitive in comparison to Australia. Someone will have the figures, but I am sure that more international airlines fly more routes and carry more people from Australia than they do Canada.

    Quoting ElPistolero (Reply 78):
    •Air Canada v Qantas: IATA CEO and director general Tony Tyler compared Canada with Australia, which has a much more open philosophy. He noted that, in "Australia, a country that ... closely resembles Canada in terms of geography, demographics, resources and other vital statistics ... aviation directly contributes 2.2% of GDP for Canada, and 2.6% for Australia. If we include catalytic benefits through tourism, GDP contribution rises to 2.8% for Canada - but to 6.1% for Australia.

    "Furthermore, although Canada has a population that is approximately 50% larger than Australia and a landmass that is 20% greater, Australia has more air travel: 78 million passengers travel to, from and within Australia, compared to 71 million for Canada. Australia's airlines carried 58 million passengers, compared to 52 million for airlines based in Canada."

    Thanks for sharing, those are the sort of figures I've wanted before. Admittedly tourism is a bigger economic activity in Australia than Canada, but even so... I think they're quite telling.

    6 million international tourists visit Australia p.a. 72 million (71+USA attrition) + 6 does = 78 million. But that means that Australians must do about 1/3 more flying to make up for the population imbalance in Canada's favour.

    Source: http://www.tourism.australia.com/en-au/news/media-releases_4339.aspx

    Quoting ElPistolero (Reply 78):
    One of my favourite examples is Panama. Copa Airlines in Panama is the third most profitable airline in the world, and it has indicated that it would like to fly to Canada. We have a treaty with it that allows it unlimited rights to fly to Canada from any airport except Panama City. Name another airport in Panama."

       Honestly I don't I've ever laughed so much at a post on ANet!


    End note: Let me be clear. I'm not saying that Australia's aviation policy is wonderful and Canada's dreadful. I just wish to debunk the myth that EK and friends have somehow destroyed our aviation industry.



    Worked Hard, Flew Right
    User currently offlineViscount724 From Switzerland, joined Oct 2006, 25999 posts, RR: 22
    Reply 80, posted (2 years 7 months 3 weeks 2 days 3 hours ago) and read 8853 times:

    Quoting ElPistolero (Reply 78):
    Quoting Viscount724 (Reply 76):
    Many cities in Canada have far more international service in relation to their population than U.S. cities with similar and often much larger populations. Many U.S. cities much larger than YYC/YEG/YOW/YHZ have no international service at all.

    Really? Which ones?

    STL for one. Well over twice the population of YYC/YEG/YOW and as far as I know, no international service (not counting AC to YYZ and possibly some minimal service to Mexico). STL did have limited transatlantic service until TWA went out of business.

    U.S. cities like Phoenix, San Diego, Pittsburgh, Portland, San Antonio, Cincinnati, Cleveland, Kansas City, Las Vegas, Columbus, Charlotte, Austin, Indianapolis, Nashville and several others all have larger metro area populations than YYC and a few are bigger than YVR. Some have no international service (again excluding Canada/Mexico in a few cases), and a few have very minimal transatlantic service, sometimes just one carrier to one destination.

    Yes, they have one-stop connecting service but so do all major Canadian cities. Compare PHX, with a population roughly 4 times YYC's (also much larger than YUL and YVR), but no nonstop intercontinental service apart from one daily BA nonstop to LHR.

    Quoting ElPistolero (Reply 78):
    although Canada has a population that is approximately 50% larger than Australia and a landmass that is 20% greater, Australia has more air travel: 78 million passengers travel to, from and within Australia, compared to 71 million for Canada. Australia's airlines carried 58 million passengers, compared to 52 million for airlines based in Canada."

    That's a meaningless comparison. You have to consider the geography. Australia is an island a long way from anywhere else. You have to fly to go anywhere internationally. As already mentioned, most major Canadian cities are a short drive from the U.S. border and the U.S. is by far the largest international destination for Canadians. Millions of Canadians can get there by car, bus or train. Australians who want to leave the country have no option but to fly. By definition that means Australia is going to have a higher rate of air travel per capita than Canada.


    User currently offlineElPistolero From Canada, joined Feb 2012, 1039 posts, RR: 4
    Reply 81, posted (2 years 7 months 3 weeks 2 days 3 hours ago) and read 8830 times:

    Quoting Viscount724 (Reply 80):

    That's a meaningless comparison. You have to consider the geography. Australia is an island a long way from anywhere else. You have to fly to go anywhere internationally. As already mentioned, most major Canadian cities are a short drive from the U.S. border and the U.S. is by far the largest international destination for Canadians. Millions of Canadians can get there by car, bus or train. Australians who want to leave the country have no option but to fly. By definition that means Australia is going to have a higher rate of air travel per capita than Canada.

    Really? I would think a meaningless comparison would involve comparing a Torontonian driving to Buffalo for the day to shop, to an Aussie flying to SIN.

    Your logic assumes that all Canadians drive to border towns. Most major cities are at least 4hrs + from any major Canadian city (SEA being the major exception). You can hardly compare someone doing a grocery run from Niagara to Buffalo to someone travelling from YUL/SIN for grocery runs). we're still doing worse than them by 10%. Even if you slash Canada's population to Australias size (ie by 33%+) or 11 million people, you still end up with a 10% difference in travel numbers in Australia's favor.

    Besides, you mentioned how all the flights you flew in Canada were full up. And yet Canadians travel half as much as Americans. What does that tell you? That Canada is well-served?

    Quoting Viscount724 (Reply 80):
    Yes, they have one-stop connecting service but so do all major Canadian cities. Compare PHX, with a population roughly 4 times YYC's (also much larger than YUL and YVR), but no nonstop intercontinental service apart from one daily BA nonstop to LHR.

    Or those direct routes aren't viable because there's intense competition on one-stop options and people have voted with their wallets and chosen them. Don't forget that the US is a country that lets market forces decide. Unlike Canada, where flights like FRA (85% transit pax accoridng to ACs own numbers) are used as justification for stopping competitors from increasing their frequency to a different airport.

    I should add that YOW, YHZ, YEG only have one carrier for transtatlantic - AC (plus the odd charter/seasonal). YYC effectively serves several points between YYZ and YVR, most of it is fed in by WS and AC. So really, I don't see your point. Is YYC getting traffic because it is YYC, or is it getting traffic because it is catering to most of Canada's prairies? Portland, for example, is as far from SEATAC as YVR. STL went defunct with TWA, as did, I think Kansas City. It kind of rings hollow.

    Either which way, none of it addresses the simple fact that even a Conservative Canadian Senator has admitted that many specialists in the field are complaining about the lack of competition in Canada.

    You originally asked me how I could say there is no competition in Canada? I said it on the basis of the Senators words. And the words of a UofT economist. And so on. After all, if you take AC's JV with LH, you can turn 4 (AC, LH, LX, OS) airlines offering the bulk of Canada's international air travel into the one airline it actually is. Metal-neutral, I believe they call it. Some competition, that.

    [Edited 2012-04-30 20:33:27]

    User currently offlineViscount724 From Switzerland, joined Oct 2006, 25999 posts, RR: 22
    Reply 82, posted (2 years 7 months 3 weeks 2 days 2 hours ago) and read 8791 times:

    Quoting ElPistolero (Reply 81):
    (AC, LH, LX, OS) airlines offering the bulk of Canada's international air travel into the one airline it actually is. Metal-neutral, I believe they call it. Some competition, that.

    I believe AC only has a revenue-sharing agreement with LH, not LX or OS. They codeshare but I don't think it goes beyond that.

    Quoting ElPistolero (Reply 81):
    STL went defunct with TWA, as did, I think Kansas City.

    Kansas City never had any nonstop intercontinental service.

    Quoting ElPistolero (Reply 81):
    And yet Canadians travel half as much as Americans. What does that tell you? That Canada is well-served?

    That's not true for intercontinental travel. A significantly higher percentage of Canadians than Americans have passports. In fact, the high rate of international travel by Canadians is one reason why cities like YYC/YEG/YHZ have had direct service to Europe for decades, when they were much smaller cities.

    [Edited 2012-04-30 21:11:23]

    User currently offlineFlyboyOz From Australia, joined Nov 2000, 1987 posts, RR: 25
    Reply 83, posted (2 years 7 months 3 weeks 1 day 23 hours ago) and read 8631 times:

    Quoting RyanairGuru (Reply 70):

    QF cut FCO because it was entirely VFR traffic with next to no premium traffic

    What is premium traffic? Does it means that the airlines have to pay more for that premium traffic?



    The Spirit of AustraliAN - Longreach
    User currently offlineaeroblogger From India, joined exactly 3 years ago today! , 1363 posts, RR: 0
    Reply 84, posted (2 years 7 months 3 weeks 1 day 22 hours ago) and read 8631 times:

    Quoting FlyboyOz (Reply 83):

    What is premium traffic? Does it means that the airlines have to pay more for that premium traffic?

    Premium traffic is people who pay to fly in Business or First class. Some definitions of premium traffic also include people who buy last-minute (full fare) economy tickets.

    VFR traffic is "visiting friends and relatives" traffic - relatively low yielding, although higher than pure leisure travellers generally.



    Airports 2012: IXE HYD DEL BLR BOM CCU KNU KTM BKK SIN ICN LAX BUR SFO PHX IAH ORD EWR PHL PVD BOS FRA MUC IST
    User currently offlineFlyboyOz From Australia, joined Nov 2000, 1987 posts, RR: 25
    Reply 85, posted (2 years 7 months 3 weeks 1 day 22 hours ago) and read 8592 times:

    ah ok thanks.... it makes sense to me.


    The Spirit of AustraliAN - Longreach
    User currently offlineElPistolero From Canada, joined Feb 2012, 1039 posts, RR: 4
    Reply 86, posted (2 years 7 months 3 weeks 1 day 18 hours ago) and read 8459 times:

    Quoting Viscount724 (Reply 82):

    I believe AC only has a revenue-sharing agreement with LH, not LX or OS. They codeshare but I don't think it goes beyond that.

    Given that LH owns OS and LX, I would take that with a pinch of salt. I somehow think it might be a bit disingenuous for LH/OS/LX and AC to claim that there is no information sharing or price coordination going on (for transitting traffic), which is, of course, beyond code-sharing.

    Quoting Viscount724 (Reply 82):
    Kansas City never had any nonstop intercontinental service

    You're right. I was thinking of the TWA debacle. Either which way, I think its impossible for every city in the US to have direct service to Europe, if only because of logistical constraints for airlines (how many aircraft can an airline dedicate to every airport) combined with high levels of competition from one-stop options.

    Quoting Viscount724 (Reply 82):
    That's not true for intercontinental travel. A significantly higher percentage of Canadians than Americans have passports. In fact, the high rate of international travel by Canadians is one reason why cities like YYC/YEG/YHZ have had direct service to Europe for decades, when they were much smaller cities.

    Having a passport does not mean using the passport frequently. Many people got a passport recently "just in case" the US required it (in the aftermath of the American requirement to carry a passport to fly to the US). How often do they use them? The U of T professor claims Americans fly twice as much as Canadians. I don't think the number of passports shows much. After all, a much larger percentage of Canada's population comprises recent (1st and 2nd Gen) immigrations. They fly to their former homelands once - or twice - a year. It doesn't mean they fly intercontinentally more frequently than Americans.

    It also raises an important question about domestic travel. If a significant chunk of Canadians are flying intercontinentally, and Canadians still fly half as much as Americans, then it suggests that transborder and domestic rates are low too. In a country as spread out as Canada, it is a bit alarming than that domestic flying rates are lower then they are in the US, because it suggests that less people from YYC, YVR, YHZ (or vice versa) than one would expect. That, in turn, leads one to think about how many Canadian travellers dollars are being spent abroad, versus the number being spent in Canada. IMHO, this points to a policy failure. Granted, people smarter than myself are raising similar issues in the Senate.

    But lets not get too sidetracked. I, for one, look forward to the Senate's next round in its study. TIll then, this islargely about the EK pamphlet, but it has shed light on AC's own EK mythology (as well as some aspects of AC's Canada mythology). I think more questions have been asked, than answered, about AC's claims about EK and Australia, and theres even a question there about Australia's TPAC policy. I daresay most Canadians did not/do not know that Australia has open skies with the US. The way it is portrayed by AC - and several Canadian aviation enthusiasts - you would think that Australia is as protectionist about TPAC as AC is about EK and TATL. This does not appear to be the case.

    I should add that this thread - and EK's document - have been useful. Perhaps a little indirectly, but they have shed light on some of the mythologies surrounding EK and raised not a few questions about the credibility AC's own EK document, not to mention the reliability of some of the claims made by Canadian a.netters about the state of the Canadian market.

    [Edited 2012-05-01 04:36:12]

    User currently offlineRyanairGuru From Australia, joined Oct 2006, 5939 posts, RR: 5
    Reply 87, posted (2 years 7 months 3 weeks 1 day 18 hours ago) and read 8425 times:

    Quoting ElPistolero (Reply 86):
    I should add that this thread - and EK's document - have been useful. Perhaps a little indirectly, but they have shed light on some of the mythologies surrounding EK and raised not a few questions about the credibility AC's own EK document

      

    While the last 20 or so posts haven't been directly on-topic, I think that this report from EK - read in conjunction with other statements - has allowed something of a better understanding of that murky world of half-truths and baked-up stories which surround this issue. I think that is all that EK wanted from it tbh.



    Edit: I've just read back over this thread, and I was struck by mine and Gkirk's cynicism in posts 1 and 2. On a personal level I'd like to thank everyone (from both sides of this debate) for the relative lack of mud-slinging and genuinely inciteful discussion. I think this may have restored my faith in ANet!
    (I hope that doesn't sound too patronising - it certainly wasn't intended if it does)

    [Edited 2012-05-01 04:57:06]

    [Edited 2012-05-01 05:03:58]


    Worked Hard, Flew Right
    User currently offlineSydscott From Australia, joined Oct 2003, 3189 posts, RR: 20
    Reply 88, posted (2 years 7 months 3 weeks 1 day 17 hours ago) and read 8356 times:

    Quoting SInGAPORE_AIR (Reply 63):
    Would you be so kind as to provide some examples of erroneous "crap" produced by Emirates ?

    I wouldn't call it crap, just slightly misleading. See below in relation to QF.

    Quoting SInGAPORE_AIR (Thread starter):
    A timeline of some notable airline state support events including: EI, AF, AZ, BA, IB, LH, OA, QF, TP and LX

    The 1992 $1.4 billion debt write off by the Australian Government in relation to QF is wrong. Lets state some facts;

    June 1992 - QF, at that time a State Owned Airline, purchased Australian Airlines for $400 million.

    March 1993 - The Australian Government injected $1.35 billion into Qantas. This was mainly because QF, up until that point, was woefully under-capitalised and the Government was looking to turn QF around so it could sell it off.

    March 1993 - British Airways buys 25% of Qantas from the Government for $665 million.

    July 1995 - The Australian Government floats Qantas and received $1.45 billion for its stake.

    Now my basic maths tells me that the Australian Government re-couped its investment in Qantas and that the Emirates document fails to take this into account.


    User currently offlineElPistolero From Canada, joined Feb 2012, 1039 posts, RR: 4
    Reply 89, posted (2 years 7 months 3 weeks 1 day 8 hours ago) and read 8103 times:

    Quoting Sydscott (Reply 88):
    Now my basic maths tells me that the Australian Government re-couped its investment in Qantas and that the Emirates document fails to take this into account.

    By the same token, the UAE can argue that EK has repaid the government investment in it by increasing tourism revenue to a tiny country with no particularly appealing attributes - its just a desert with malls, as one poster put it - and, crucially, helping Dubai turn into an aviation hub, thereby facilitating its rise as one of the more important financial and commercial hubs in the world.

    One question we should all ask ourselves is: Where would Dubai be today without EK? One need only look at the belated attempt by Abu Dhabi - the better resourced Emirate - to see the lead that Dubai has built up financially, commercially and as a tourist destination.

    Love the UAE/EK or hate it, the transformation of "many acres of Sand" (before anyone gets upset, I m paraphrasing Voltaire, the philosopher Canadians once loved to hate because of his similar assessment of Quebec - replace 'sand' with 'snow') has been substantial. EK has played a crucial role in this - it has been an extremely important vehicle of growh for the UAE, a nation that might well have gone the way of Kuwait, or Bahrain or any number of oil-rich but insignificant Gulf nations.

    Personally, I favor using aviation as a strategic asset in the way the UAE has. Why is it considered so radical in the west to see an airline not as just some company that needs to make money, but rather as a vital cog in economic growth which, if deployed properly and supported, can have a catalytic effect across the economy?

    Criticizing EK is easy - but it has put into practice the idea of using airlines as strategic assets. In doing so, it has illustrated, rather than left to theory, the positive impact of this approach, as well as the flaws in the current wisdom prevailing in the west of taxing airlines to death.


    User currently offlineSydscott From Australia, joined Oct 2003, 3189 posts, RR: 20
    Reply 90, posted (2 years 7 months 3 weeks 1 day 8 hours ago) and read 8073 times:

    Quoting ElPistolero (Reply 89):
    By the same token, the UAE can argue that EK has repaid the government investment in it by increasing tourism revenue to a tiny country with no particularly appealing attributes

    I'm not an EK hater, but if you're going to publish a document with only half the story in the they deserve to be picked up on. And in relation to EK, Australia has had one of the most liberalised policies towards their development. So I think picking up half a fact on QF is a bit disingenuous. I have no idea whether what they say about other airlines is correct or not, I'll let other discuss that.

    Quoting ElPistolero (Reply 86):
    I think more questions have been asked, than answered, about AC's claims about EK and Australia, and theres even a question there about Australia's TPAC policy. I daresay most Canadians did not/do not know that Australia has open skies with the US. The way it is portrayed by AC - and several Canadian aviation enthusiasts - you would think that Australia is as protectionist about TPAC as AC is about EK and TATL. This does not appear to be the case.

    The reason people think Australia is protectioniest is because of the constant issue about SQ wanting to fly TPAC and Australia not letting them. The reason we don't let them fly TPAC is simple. Singapore has nothing to trade, in terms of air rights with Australia, that has the same potential value to Qantas or Virgin out of Singapore that SQ would get by being allowed onto the TPAC route. If they did, they would have been allowed on. It really is that simple. In return for the beyond rights that Australian airlines enjoy out of Singapore, SQ got virtually unlimited 6th freedom rights. So they really don't have any cards to play that would buy them onto the TPAC routes. And realistically, with Delta and VA on them, they're no longer needed.

    In relation to Canada, the most recent attempt to liberalise the Australia-Canada agreement came when QF was flying SFO-YVR and AC wanted to fly YYZ-LAX-SYD. QF wanted to swap the SFO-YVR to LAX-YVR but the Treaty between Australia and Canada didn't allow LAX as a transit point. It didn't happen then because AC didn't want QF using LAX. So AC started YVR-SYD instead, QF dropped YVR again and the treaty remains stupidly restrictive.

    My final point, if Australia was really protective it wouldn't have let Ansett going bankrupt, it wouldn't allow Tiger Airways to operate a domestic airline which is 100% owned by Singaporeans and it wouldn't have allowed Virgin to start up as a majority British owned carrier. Now would it have allowed Air New Zealand to buy 100% of Ansett Domestic, and 49% of Ansett International, nor would it have allowed Air New Zealand to buy 20% of Virgin with Richard Branson still holding 26%. In fact, nor would it have allowed Emirates to build up the huge levels of services that it has, including Trans Tasman services, from a country with limited O&D traffic.


    User currently offlineElPistolero From Canada, joined Feb 2012, 1039 posts, RR: 4
    Reply 91, posted (2 years 7 months 3 weeks 1 day 7 hours ago) and read 8025 times:

    Quoting Sydscott (Reply 90):
    The reason people think Australia is protectioniest is because of the constant issue about SQ wanting to fly TPAC and Australia not letting them. The reason we don't let them fly TPAC is simple. Singapore has nothing to trade, in terms of air rights with Australia, that has the same potential value to Qantas or Virgin out of Singapore that SQ would get by being allowed onto the TPAC route. If they did, they would have been allowed on. It really is that simple. In return for the beyond rights that Australian airlines enjoy out of Singapore, SQ got virtually unlimited 6th freedom rights. So they really don't have any cards to play that would buy them onto the TPAC routes. And realistically, with Delta and VA on them, they're no longer needed.

    Very informative posts. Thanks.

    I think your post has shed a lot of light on an issue that Canadians tend to associate with EK. Australia's 'restrictive' TPAC policies often come up during conversations about EK, and how it has killed Euro carriers and how Australia has to protect Australian carriers on TPAC because EK is killing them on the kangaroo route.

    Personally, it never made sense to me.

    Quoting Sydscott (Reply 90):
    In relation to Canada, the most recent attempt to liberalise the Australia-Canada agreement came when QF was flying SFO-YVR and AC wanted to fly YYZ-LAX-SYD. QF wanted to swap the SFO-YVR to LAX-YVR but the Treaty between Australia and Canada didn't allow LAX as a transit point. It didn't happen then because AC didn't want QF using LAX. So AC started YVR-SYD instead, QF dropped YVR again and the treaty remains stupidly restrictive.

    Very, very interesting. Seems to me as though AC shot itself in the foot on this one. Which is completely at odds with...oh what the hell - I might as well put AC's words instead of explaining them:

    "Since Emirates entered the Australian market in 1996, no fewer then 11 Australian and Continental European operators have terminated service. That traffic and the associated economic benefits now flow through Dubai.

    In 2000, Australia enjoyed services to nine European cities aboard 5 carriers (Qantas, British Airways, KLM, Austrian and Alitalia). Today, the only carriers left serving Australia are British Airways, Qantas and Virgin Atlantic operating to just two European cities: London and Frankfurt.

    As a result of the Australian experience with the Gulf carriers, the Australian government today has decided to block any new carrier access to its Trans-Pacific routes (i.e. Australia to North America) including the refusal to provide these rights to Canada at the negotiations held in February 2009. The Australian government has made it clear that Australian carriers (particularly V Australia) will be given reasonable opportunity to establish services on the Trans-Pacific route prior to negotiating any new rights for Trans-Pacific Access with any country."

    http://www.aircanada.com/en/about/media/facts/industry/emirates.html

    I must ask though - what happened in 2009? Was that when QF stopped flying to Canada?

    Quoting Sydscott (Reply 90):
    My final point, if Australia was really protective it wouldn't have let Ansett going bankrupt, it wouldn't allow Tiger Airways to operate a domestic airline which is 100% owned by Singaporeans and it wouldn't have allowed Virgin to start up as a majority British owned carrier. Now would it have allowed Air New Zealand to buy 100% of Ansett Domestic, and 49% of Ansett International, nor would it have allowed Air New Zealand to buy 20% of Virgin with Richard Branson still holding 26%. In fact, nor would it have allowed Emirates to build up the huge levels of services that it has, including Trans Tasman services, from a country with limited O&D traffic.

    Well, let it be known that there are provinicial government folk in BC who hold Australia up as a beacon to be followed. Sadly, I can't say the same about AC and Transport Canada folk. Living in Ottawa, I sometimes wonder how many of the bureaucrats working at Transport Canada have ever left the country - I really feel like the bureaucrats (many of whom are born here and have been educated in this town) could use some real-world exposure.

    I really wish we could call an Australian Transport official to the Senate hearings. And invite Duncan Dee or Calin (ACs COO and CEO respectively) to sit next to him  

    Perhaps I should start a new thread to let the Canadians and the Aussies shed light on this bizzare affair. Australia and Canada have very close relations in everything - I m surprised they haven't reached one on something as simple as this.


    User currently offlinezeke From Hong Kong, joined Dec 2006, 9229 posts, RR: 76
    Reply 92, posted (2 years 7 months 3 weeks 1 day 6 hours ago) and read 7998 times:

    Quoting Sydscott (Reply 90):

    The reason people think Australia is protectioniest is because of the constant issue about SQ wanting to fly TPAC and Australia not letting them.

    AFAIK SQ Cargo does have rights to operate the Pacific today. Australia has offered SQ numerous times to support them in flying the Pacific, all they have to do is to fly the routes under an Australian AOC, requiring the airline to be 51% Australian owned. This would put the cost structures of the airlines on similar footing.

    Also I seem to recall that EK purchased a large parcel in AKL, that was rumoured at one stage as a possible pacific base to enable them to fly TPAC. Also I think today, EK now flies more seats trans-tasman than QF does. NZ registered aircraft and airlines have special access rights in Australia from what I understand.



    We are addicted to our thoughts. We cannot change anything if we cannot change our thinking – Santosh Kalwar
    User currently offlineViscount724 From Switzerland, joined Oct 2006, 25999 posts, RR: 22
    Reply 93, posted (2 years 7 months 3 weeks 1 day 6 hours ago) and read 7979 times:

    Quoting Sydscott (Reply 90):
    In relation to Canada, the most recent attempt to liberalise the Australia-Canada agreement came when QF was flying SFO-YVR and AC wanted to fly YYZ-LAX-SYD. QF wanted to swap the SFO-YVR to LAX-YVR but the Treaty between Australia and Canada didn't allow LAX as a transit point. It didn't happen then because AC didn't want QF using LAX. So AC started YVR-SYD instead, QF dropped YVR again and the treaty remains stupidly restrictive.

    Do you have a source for that rationale? I can't believe the issue of QF 5th freedom rights LAX-YVR would be a concern for the Canadian government or AC, and AC would be fully aware that they would never get 5th freedom rights from LAX unless the same rights were granted to QF.

    It was my understanding that the primary reason for AC not obtaining LAX-SYD 5th freedom rights was because SQ at the time was lobbing heavily for 5th freedom rights in the same market and the Australian government was strongly opposed to granting such rights to SQ. It would seriously weaken their arguments against SQ's request if they were to grant the same rights to AC, so they preferred to leave things as they were.

    In fact, I don't think AC's proposed YYZ-LAX-SYD operation was ever a very serious proposal. Makes much more sense ot operate via YVR where there's no direct competition YVR-SYD than in the highly-competitive LAX-SYD market. Fifth freedom carriers almost always generate lower yields than the 3rd/4th freedom national carriers.


    User currently offlineElPistolero From Canada, joined Feb 2012, 1039 posts, RR: 4
    Reply 94, posted (2 years 7 months 3 weeks 1 day 6 hours ago) and read 7961 times:

    Quoting Viscount724 (Reply 93):

    It was my understanding that the primary reason for AC not obtaining LAX-SYD 5th freedom rights was because SQ at the time was lobbing heavily for 5th freedom rights in the same market and the Australian government was strongly opposed to granting such rights to SQ. It would seriously weaken their arguments against SQ's request if they were to grant the same rights to AC, so they preferred to leave things as they were.

    Interesting, but it still begs the question: Why is AC linking this negotiation to EK?

    Quoting Viscount724 (Reply 93):
    In fact, I don't think AC's proposed YYZ-LAX-SYD operation was ever a very serious proposal. Makes much more sense ot operate via YVR where there's no direct competition YVR-SYD than in the highly-competitive LAX-SYD market. Fifth freedom carriers almost always generate lower yields than the 3rd/4th freedom national carriers.

    For some reason, I seem to be under the impression that there is an AC-NZ angle associated with it as well.


    User currently offlineSydscott From Australia, joined Oct 2003, 3189 posts, RR: 20
    Reply 95, posted (2 years 7 months 3 weeks 1 day 4 hours ago) and read 7910 times:

    Quoting ElPistolero (Reply 91):
    "Since Emirates entered the Australian market in 1996, no fewer then 11 Australian and Continental European operators have terminated service. That traffic and the associated economic benefits now flow through Dubai.

    What that fails to mention is that the European carriers started to sign up Asian Alliance carriers around that time. So instead of having your presence as 1 daily flight to Sydney, you could terminate your services in SIN or BKK and have, for example, Thai Airways cover PER/MEL/SYD/BNE for you at a lower cost than the European Carriers themselves could have done it. Sure the rise of EK contributed to it but by the time EK had any meaningful presence in Australia the European Carriers were long gone. It was Asian carriers that killed their services along with alliances.

    Quoting ElPistolero (Reply 91):
    As a result of the Australian experience with the Gulf carriers, the Australian government today has decided to block any new carrier access to its Trans-Pacific routes (i.e. Australia to North America) including the refusal to provide these rights to Canada at the negotiations held in February 2009. The Australian government has made it clear that Australian carriers (particularly V Australia) will be given reasonable opportunity to establish services on the Trans-Pacific route prior to negotiating any new rights for Trans-Pacific Access with any country."

    That was the negotiating position in relation to SQ and was basically a nice way to say no. I don't recall it being the same with Air Canada because the treaties and agreements in play were different.

    Quoting Viscount724 (Reply 93):
    Do you have a source for that rationale? I can't believe the issue of QF 5th freedom rights LAX-YVR would be a concern for the Canadian government or AC, and AC would be fully aware that they would never get 5th freedom rights from LAX unless the same rights were granted to QF.

    At the time I recall both Governments being keen to do a virtual Open Skies deal with the Australian Govt concerned to give VA the chance to start its services if it wanted to. However once AC figured out they could do YVR-SYD non-stop and that there wasn't going to be a treaty change quickly they withdrew the YYZ-LAX-SYD. The issus of a new treaty is still dead as far as I can see. But I don't have a news article or something which specifically states it.

    Quoting Viscount724 (Reply 93):
    It was my understanding that the primary reason for AC not obtaining LAX-SYD 5th freedom rights was because SQ at the time was lobbing heavily for 5th freedom rights in the same market and the Australian government was strongly opposed to granting such rights to SQ. It would seriously weaken their arguments against SQ's request if they were to grant the same rights to AC, so they preferred to leave things as they were.

    That's not entirely correct. The reason AC didn't obtain 5th freedom rights is because in order for them to have them the treaty would need to be changed. To quote from the Australian side of the treaty:

    "Full fifth freedom traffic rights may be exercised at Honolulu, Fiji, Tahiti and San Francisco by the designated airline(s) of Australia, where code share services are offered on the flights of the designated airline(s) of Canada, subject to a total of 1660 seats per week in each direction."

    http://www.infrastructure.gov.au/avi...ster_available_capacity_260412.pdf

    In relation to SQ, the article below nicely summarises the position of the players at the time.

    http://www.smh.com.au/news/business/...dney/2006/01/26/1138066920839.html

    From an Australian Govt point of view, the rights issue for AC is far different than that of Singapore. Singapore doesn't really have anything to trade for additional rights. Now if a liberalised ASEAN aviation regime meant that QF could own 100% of JQ Asia and still be a designated flag carrier of Singapore you would see a dramatic shift in Australian Govt sentiment. That is something that would be worth trading some rights for.

    Quoting Viscount724 (Reply 93):
    In fact, I don't think AC's proposed YYZ-LAX-SYD operation was ever a very serious proposal. Makes much more sense ot operate via YVR where there's no direct competition YVR-SYD than in the highly-competitive LAX-SYD market. Fifth freedom carriers almost always generate lower yields than the 3rd/4th freedom national carriers.

    Completely agreed.

    Quoting ElPistolero (Reply 94):
    Interesting, but it still begs the question: Why is AC linking this negotiation to EK?

    I don't think either of them should hold this out as "protectionism". As I said, EK has enjoyed a hugely liberal environment down under while AC is the sole carrier from Australia direct into Canada.


    User currently offlineSInGAPORE_AIR From United Kingdom, joined Nov 2000, 13745 posts, RR: 19
    Reply 96, posted (2 years 7 months 2 weeks 3 days 16 hours ago) and read 7487 times:

    With regards to Emirates' financing, an article here may be of interest to some: Source: Arabian Business




    Flanagan said Emirates has never had any issues getting financing and it has always received a favourable response from banks and investors.

    “We have never had any trouble getting finance or getting a bond oversubscribed. Six times that last one was oversubscribed, which shows what the market thinks of us,” he said.



    Anyone can fly, only the best Soar.
    User currently offlinelightsaber From United States of America, joined Jan 2005, 13529 posts, RR: 100
    Reply 97, posted (2 years 7 months 2 weeks 3 days ago) and read 7207 times:
    Support Airliners.net - become a First Class Member!

    Quoting ElPistolero (Reply 89):
    One question we should all ask ourselves is: Where would Dubai be today without EK? One need only look at the belated attempt by Abu Dhabi - the better resourced Emirate - to see the lead that Dubai has built up financially, commercially and as a tourist destination.

    It is worthy of noting. The once sparsely populated Dubai now appears to have fractionally more people than Abu Dhabi. I would note it was economic growth that drove that population growth.

    Quoting ElPistolero (Reply 89):
    Criticizing EK is easy - but it has put into practice the idea of using airlines as strategic assets. In doing so, it has illustrated, rather than left to theory, the positive impact of this approach, as well as the flaws in the current wisdom prevailing in the west of taxing airlines to death.

    While I agree with your statement, I would note that many nations once used airlines as strategic assets. The issue is that most either do not do so or do so poorly. Dubai/EK did so in an extremely competitive environment.

    Quoting Sydscott (Reply 95):
    It was Asian carriers that killed their services along with alliances.

    I would agree.


    EK has faults. I wish they could be discussed more rationally on a.net.

    Lightsaber



    Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
    User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17823 posts, RR: 46
    Reply 98, posted (2 years 7 months 2 weeks 2 days 21 hours ago) and read 7132 times:

    Quoting ElPistolero (Reply 89):
    Where would Dubai be today without EK?

    Or where would EK be without the government investment in Dubai--the investment that nearly bankrupted the emirate and required a bailout from bigger brother Abu Dhabi. Dubai knows its position as a hub is not supportable without creating a local market and destination--EK may not receive any direct subsidies, but the destination of Dubai obviously does.

    Quoting gigneil (Reply 56):
    And that's exactly what EK is, a government entity.

    Prove it.

      EK is owned by the Emirates Group, which is wholly owned by the Government of Dubai.



    E pur si muove -Galileo
    User currently offlinecmf From , joined Dec 1969, posts, RR:
    Reply 99, posted (2 years 7 months 2 weeks 2 days 20 hours ago) and read 7011 times:

    Quoting MaverickM11 (Reply 98):
    Or where would EK be without the government investment in Dubai--the investment that nearly bankrupted the emirate and required a bailout from bigger brother Abu Dhabi.

    EK was a viable business long before the Dubai boom. Largely relying on connecting passengers. No doubt they benefited from the building boom and all the people and companies it brought to Dubai and the region but are you suggesting they would not be a significant airline without it?


    User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17823 posts, RR: 46
    Reply 100, posted (2 years 7 months 2 weeks 2 days 19 hours ago) and read 6890 times:

    Quoting cmf (Reply 99):
    are you suggesting they would not be a significant airline without it?

    It would be less significant, both in terms of volume and profitability. One of the benefits of a hub is the ability to offer a compelling network to the home population and derive a premium from it--without that a large chunk of EK's--or any hubbing carrier's--profits would be quickly competed away.



    E pur si muove -Galileo
    User currently offlineElPistolero From Canada, joined Feb 2012, 1039 posts, RR: 4
    Reply 101, posted (2 years 7 months 2 weeks 2 days 17 hours ago) and read 6795 times:

    Quoting MaverickM11 (Reply 98):

    Not really sure what you're getting at. EK would have been no where without Dubai investing in Dubai ??? What nation would be anywhere without investing in itself? No country can survive without infrastructure - and very few, if any, airlines build airports. I appear to be missing a key part in the puzzle.

    I also think the local market argument is a red herring. Why can't an airline make money without one? Nor do I think having a local market, especially one that pays a premium, guarantees a profit (or even viability). Witness Air Canada. In EKs case, the home market isn't necessarily limited to Dubai. I would argue that Pakistan and Bangladesh are de facto home markets, given their nominal (even token) airlines and the utter lack of western carriers. Those markets have entire J and F markets to the west that are barely served.

    As for EK being state-owned, so is Air China and so is Air NZ. I fail to see what difference it makes, given that EK is profitable. My own understanding is that it is meant be a profitable economic and tourism enabler for Dubai. Granted I may be in the minority - the folk at LH and AC certainly believe that EKs sole goal is to destroy them for the Sheikhs amusement.


    User currently offlinelightsaber From United States of America, joined Jan 2005, 13529 posts, RR: 100
    Reply 102, posted (2 years 7 months 2 weeks 2 days 14 hours ago) and read 6763 times:
    Support Airliners.net - become a First Class Member!

    Quoting MaverickM11 (Reply 100):
    It would be less significant, both in terms of volume and profitability. One of the benefits of a hub is the ability to offer a compelling network to the home population and derive a premium from it--without that a large chunk of EK's--or any hubbing carrier's--profits would be quickly competed away

    The boom helped bring EK above their competitors. I'm certain the press on the man-made islands, indoor ski slope, and tallest building in the world help EK gain mindshare.

    Quoting ElPistolero (Reply 101):
    My own understanding is that it is meant be a profitable economic and tourism enabler for Dubai.

       Dubai is an oil importer. They survive off tourism, logistics (import/export), and a bridge between Western and Islamic friendly banking.

    Ironically, I expect the next boom in Dubai to be due to allowing bankruptcy:
    http://www.khaleejtimes.com/biz/insi...ess_May106.xml&section=uaebusiness

    I expect an extended debate, but if Dubai allows bankruptcy laws onto the books, it will spur investment into the city-state.

    Lightsaber



    Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
    User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17823 posts, RR: 46
    Reply 103, posted (2 years 7 months 2 weeks 2 days 11 hours ago) and read 6665 times:

    Quoting ElPistolero (Reply 101):
    What nation would be anywhere without investing in itself?

    The scale is night and day compared to any other nation/city. Dubai went into massive debt literally building a world in the ocean. Other nations are in massive debt because of pensions.

    Quoting ElPistolero (Reply 101):
    I also think the local market argument is a red herring. Why can't an airline make money without one?

    Without a local market, EK is just competing with QR, EY, and everyone else for the same traffic. With a local market it can charge a premium for network, schedule, and nonstops.

    Quoting ElPistolero (Reply 101):
    As for EK being state-owned, so is Air China and so is Air NZ. I fail to see what difference it makes, given that EK is profitable.

    Not sure what you're getting at--someone asked to prove that EK is state owned and it absolutely is.



    E pur si muove -Galileo
    User currently offlineElPistolero From Canada, joined Feb 2012, 1039 posts, RR: 4
    Reply 104, posted (2 years 7 months 2 weeks 2 days 8 hours ago) and read 6579 times:

    Quoting MaverickM11 (Reply 103):

    The scale is night and day compared to any other nation/city. Dubai went into massive debt literally building a world in the ocean. Other nations are in massive debt because of pensions.

    Thats a slightly questionable argument to make. The UAE built a lot more infrastructure than it did shiny toys. Highways, trains, a port, a massive airport - these are all infrastructure projects. Granted, in other nations, this has been spread out over time - decades even - which has ammortized the cost, but that doesn't change the fact that Germans sank billions into the autobahn or that the Dutch sank billions into Schiphol or that the Europeans (as whole) invested heavily in high-speed rail.

    It is this infrastructure - not the Palm island or the world's tallest building - that has provided the basis for the rise of EK ( the airport), commerce (the highways), tourism (basic infrastructure - roads, power, water, sewage) etc. There is a tendency to focus on the grandiose and even outright stupid in the UAE, but the debt didn't come from that - it came from infrastructure.

    Its also a bit misleading to say that Europe has massive debt because of 'pensions'. It has massive debt in part because of pensions (no one is denying that) but if it had spent less money on certain infrastructure, it would, perhaps, have well-funded pensions. After all, basic causality states that infrastructure is built using taxes. If one doesn't build the infrastrucutre, one won't have to tax as heavily, ergo one won't face pension shortfalls. That is to say - all of this is a red herring argument, bordering on misleading.

    At this rate, we might as well start blaming the US recession on that other man-made gem - Las Vegas.

    Quoting MaverickM11 (Reply 103):
    Without a local market, EK is just competing with QR, EY, and everyone else for the same traffic. With a local market it can charge a premium for network, schedule, and nonstops.

    They all seem perfectly happy to do that, not least because their local market is not a traditional 'local' market. It extends into many parts of South Asia - and that too mostly for lucrative long haul routes. QRs entire strategy is built on that. I believe it serves 19 airports in South Asia (with a 20th airport in Sri Lanka to come online soon). Only a handful of these cities have direct service to the west. No European carriers serve Sri Lanka,(seasonal Aeroflot notwithstanding), Bangladesh or Pakistan.


    User currently offlinecmf From , joined Dec 1969, posts, RR:
    Reply 105, posted (2 years 7 months 2 weeks 2 days 8 hours ago) and read 6561 times:

    Quoting MaverickM11 (Reply 100):
    It would be less significant, both in terms of volume and profitability. One of the benefits of a hub is the ability to offer a compelling network to the home population and derive a premium from it--without that a large chunk of EK's--or any hubbing carrier's--profits would be quickly competed away.

    Sure it would be less significant. So what. Hardly unique to Dubai.

    Quoting lightsaber (Reply 102):
    Dubai is an oil importer. They survive off tourism, logistics (import/export), and a bridge between Western and Islamic friendly banking.

    While I guess it could be grouped with logistics to some extent, regional offices is also very significant.

    Quoting lightsaber (Reply 102):
    I expect an extended debate, but if Dubai allows bankruptcy laws onto the books, it will spur investment into the city-state

    It should increase it. But there has already been a lot of investments, especially in the free trade zones. Several of our neighbors sell none or a very small fraction of their products in UAE. There was even a call center when we moved in. Don't know if it is still there. Remember it was a big issue because they did not route their calls via Etisalat. They got away with it because the did not take calls from UAE.


    User currently offlineElPistolero From Canada, joined Feb 2012, 1039 posts, RR: 4
    Reply 106, posted (2 years 7 months 2 weeks 2 days 8 hours ago) and read 6556 times:

    This post will likely not be of much use to non-Canadians, but it does raise questions about a claim often made by Canadian commentators on threads relating to EK and Canada.

    Another thread (the one about ET coming to EK balked at it, demanding 7, thereby allowing EY to come in and take the remaining 3. In fact, several Canadian commentators on a.net and elsewhere have mocked EK for this - for allowing EY to come in and steal 3 slots from under their nose.

    I always thought that odd, but never gave it much thought. Until I read the "Notes" attached to the UAE treaty.

    "4. For the purposes of Article XI (Capacity) the Government of the United Arab Emirates shall be entitled to allocate the following capacity among its designated airlines for the operation of own aircraft and code sharing services:

    - for direct own aircraft services, up to a maximum of four flights per week in each direction without restriction as to size of aircraft effective immediately, five flights per week effective June 1, 2001 and six flights per week effective June 1, 2003. Requests for seasonal increases in frequency shall be given sympathetic consideration consistent with paragraph 5 of Article XI. The operation of a frequency beyond three flights per week by any one designated airline shall be subject to the approval of the aeronautical authorities of both Contracting Parties."

    http://www.treaty-accord.gc.ca/text-texte.aspx?id=104312

    That last line - "The operation of a frequency beyond three flights per week by any one desiganted airline shall be subject to the approval of the aeronautical authorities of both Contracting Parties" struck me as very interesting indeed. If I am reading that correctly (and I do take pride in having a basic comprehension of english), it would mean that EK would not be allowed to take those additional three slots without the UAE AND Canada providing approval.

    So I ask the question - Do we know, for a fact, that EK was allowed to take all six slots, but refused, thereby allowing EY to come in? And if so, could someone provide us with a source? I was willing to take the standard Canadian claim at face value, but I feel compelled to have it confirmed now, since the language in the treaty hardly suggests that it was EKs for the taking.

    I did do some basic searching, but one of the more revealing things to come out of it is how remarkably cloaked in secrecy these negotiations were, which makes one wonder about the verity of the claims made both on this board and in the media.

    I think the following exchange between the Minister of Foreign Affairs and a former leader of opposition pretty much sums up how bizzare the entire EK situation was.


    Hon. Stéphane Dion:
    According to what we do know, the reasons why this disagreement took place are not related to operational considerations in the field, in Afghanistan. This was about obtaining flight or landing rights. We heard that you were defending Air Canada's point of view, which may be very legitimate, but there were also other reasons, reasons pertaining to visas and other things of that type.

    It seems to me that if these reasons do not have anything to do with operations, Canadians are entitled to know what they are.

    Hon. Lawrence Cannon:
    Mr. Dion, that is what you are claiming. I am, however, simply telling you that we felt that the offer made to the Government of Canada was not in our best interest.

    Hon. Stéphane Dion:
    If this was not related to operational reasons, could you please tell us what this was all about?

    Hon. Lawrence Cannon:
    Mr. Dion, you began your sentence with the word "if", and I'm not going to discuss negotiations that the Government of Canada undertook with the United Arab Emirates. I will simply state that this was not in the best interest of Canadians.

    Hon. Stéphane Dion:
    Will you confirm that it was also related to the awarding of flight rights?

    Hon. Lawrence Cannon:
    I do not confirm nor deny this.

    Hon. Stéphane Dion:
    If this is not linked to military reasons, why do you not want to discuss it?

    Hon. Lawrence Cannon:
    As I told you, I have absolutely no intention of discussing negotiations that Canada has undertaken with other countries.

    Hon. Stéphane Dion:
    You talk about negotiations. Does that mean that a few days before the expiry of our agreement on Camp Mirage, it would still be possible for the Government of the United Arab Emirates to change its mind? Are we now facing a fait accompli or are negotiations still underway?

    Hon. Lawrence Cannon:
    The general and chief of staff clearly indicated to you that the transfer procedure was well underway and that we will be meeting our objectives in this regard.

    Hon. Stéphane Dion:
    So there are no more negotiations.

    Hon. Lawrence Cannon:
    That's right.

    Hon. Stéphane Dion:
    If there are no longer any negotiations that are ongoing, could you talk to us about those aspects that do not pertain to problems regarding military operations in the field?

    Hon. Lawrence Cannon:
    No, I will not talk to you about that. I will simply say that we have made decisions in the best interest of Canadians.

    Hon. Stéphane Dion:
    So we will learn nothing from you about issues that have nothing to do with military security. You push secrecy to that extent.

    Hon. Lawrence Cannon:
    I am saying that it is not in the best interest of the Government of Canada. That is why we did not agree to continue those discussions.

    http://www.parl.gc.ca/HousePublicati...21&Language=E&Mode=1&Parl=40&Ses=3

    Ah democracy, transparency and all. Suffice it to say, I really don't know how much we can trust what is being said about this issue.

    [Edited 2012-05-07 15:31:01]

    User currently offlinecmf From , joined Dec 1969, posts, RR:
    Reply 107, posted (2 years 7 months 2 weeks 2 days 6 hours ago) and read 6496 times:

    Quoting ElPistolero (Reply 106):
    "The operation of a frequency beyond three flights per week by any one desiganted airline shall be subject to the approval of the aeronautical authorities of both Contracting Parties"

    Great find! Certainly question common wisdom.   


    User currently offlineViscount724 From Switzerland, joined Oct 2006, 25999 posts, RR: 22
    Reply 108, posted (2 years 7 months 2 weeks 2 days 6 hours ago) and read 6487 times:

    Quoting ElPistolero (Reply 101):
    As for EK being state-owned, so is Air China and so is Air NZ.

    Air China is only 75% state-owned, unlike 100% state-owned NZ and EK. Cathay Pacific's largest shareholder, UK-based Swire Pacific, owns about 18% of Air China, and the balance of the 25% (the upper limit under current foreign ownership rules) is publicly-traded. You can buy shares in Air China which trades on the major stock exchanges. You can't do that for NZ or EK.


    User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17823 posts, RR: 46
    Reply 109, posted (2 years 7 months 2 weeks 2 days 5 hours ago) and read 6456 times:

    Quoting ElPistolero (Reply 104):
    . The UAE built a lot more infrastructure than it did shiny toys.

    I mean all local investment, whether it's mundane infrastructure, another mall, airport, or otherwise.

    Quoting ElPistolero (Reply 104):

    They all seem perfectly happy to do that, not least because their local market is not a traditional 'local' market.

    What would separate EK from all of it's competitors if that were the case? Dubai is clearly investing to become a destination for tourism and finance, not just a hub for traffic to flow through.

    Quoting cmf (Reply 105):

    Sure it would be less significant. So what. Hardly unique to Dubai.

    which would be why I said...

    Quoting cmf (Reply 105):
    or any hubbing carrier's

    But this goes both ways. If the UK invested billions of dollars in the London economy, built everything with imported near-slave labor, built a new London airport and multiple additional terminals in LHR, and limited labor rights, BA and VS would be printing money too, even if not one single dollar was handed outright from the government to the airline.



    E pur si muove -Galileo
    User currently offlineElPistolero From Canada, joined Feb 2012, 1039 posts, RR: 4
    Reply 110, posted (2 years 7 months 2 weeks 2 days 5 hours ago) and read 6431 times:

    Quoting Viscount724 (Reply 108):
    Air China is only 75% state-owned


    Interesting. I always assumed it was 100% owned. My mistake. Thanks for pointing it out.

    I suppose we could just swap Air China for Air India there.  


    User currently offlinecmf From , joined Dec 1969, posts, RR:
    Reply 111, posted (2 years 7 months 2 weeks 2 days 4 hours ago) and read 6406 times:

    Quoting MaverickM11 (Reply 109):
    But this goes both ways. If the UK invested billions of dollars in the London economy, built everything with imported near-slave labor, built a new London airport and multiple additional terminals in LHR, and limited labor rights, BA and VS would be printing money too, even if not one single dollar was handed outright from the government to the airline.

    Ever looked at how LHR came to be? It isn't as resent as Dubai but seems hard to state UK's government didn't provide significant support at the dawn of modern aviation.

    Much better to vilify Dubai by calling paid workers slaves and ignoring who built much of Heathrow under the disguise of military need and using wartime legislation for what was for civilian use. Even Churchill complained they used people building Heathrow instead of using them for operation overlord. Or how it took till the mid 60's to finalize compensation for the land taken.

    Or all the bonds US taxpayers have taken out to build airports and terminals for US airlines. The list goes on.


    User currently offlinelightsaber From United States of America, joined Jan 2005, 13529 posts, RR: 100
    Reply 112, posted (2 years 7 months 2 weeks 2 days 3 hours ago) and read 6361 times:
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    Quoting Quokkas (Reply 12):
    Some bilaterals allow for that: for example Germany has threatened EK with fines if it did not raise its fares on some routes following complaints from LH.

    It should be noted that it is a 'unique provision' of the German/Dubai bilateral that allowed the access to 4 cities. Caveat Emptor... Perhaps EK didn't read the fine print (or expect it to ever be enforced). The bilateral also has minimum Dubai side O&D fractions.

    Quoting ElPistolero (Reply 17):
    Oh goody. The perfect cure for a sore-throat ravaged Saturday morning.

    We're sick in more than one way.  
    Quoting ElPistolero (Reply 28):
    Alright, then lets put it this way: We live in an age of globalization, yes? Every multinational company is competing on a global scale, yes? People are buying products made all around the world, yes? The thing that troubles me about posts that talk about "friendly business environment", "finance easiness" or "lack of work rights/trade unions", is that if you are going to use those as key sticking points, then apply them equally.

    I'd like to a minimum workers rights... But a pay scale? That would require a financial shock that most of the world wouldn't tolerate. I should say most of those with money (meaning anyone earning over $2,000 a year).

    Quoting ElPistolero (Reply 57):
    an EK and another one will show up. The model has been set, and it is working. TK is planning on emulating the EK model, and over time it might well succeed.

    Exactly. If not EK, then QR or TK or EY or... There will be competition.

    Quoting Prinair (Reply 52):
    The solution is simple... All other airlines should just lobby their governments to either limit or cancel Emirates landing rights in their respective countries. After all as luxurious as DXB is, it is a piece of overrated real estate in the desert.

    That's nuclear financially. Dubai is the logistics center of the mid-east. In particular after the 'Arab Spring' in Bahrain. Cancelling a bilateral means ones companies are cut off from the Dubai logistics. The landing rights were part of a trade negotiation. For example, Dubai facilitates Indian company chemical and pharma exports. The India/Dubai bilateral allows reversion back to the prior bilateral with only 30 days notice. In a mere 30 days AI would have about half the EK competition, at the expense of Indian chemical and pharma. (Trust me, this would warm up Dubai/Germany relations fast.)

    Quoting cmf (Reply 105):
    It should increase it. But there has already been a lot of investments, especially in the free trade zones.

    I think being the one regional nation with free flows of capital, a business friendly climate, good transportation, westernized zones (as well as hotels catering to Chinese, etc.), and bankruptcy should be a nice acceleration of investment into Dubai.

    Quoting MaverickM11 (Reply 109):
    If the UK invested billions of dollars in the London economy

    I wish more Western economies invested more in infrastructure. If the UK either built out LHR as a 24/7 3-runway airport or build the Thames Estuary airport with good ground transportation to various parts of London, then we wouldn't be worrying so much about EK. I have hypothesized for years that most of the impetus for the mid-east hub airline growth has been lack of 24/7 European hub expansion. e.g., the nightime flight ban at FRA is quite the gift to EK. Same with any European hub with night ops limits/curfew or constrained access (LHR, BER, FRA, MUC, CDG, etc.).

    For example, how many of those Russian aircraft banned from European airspace switched to flying to Dubai (or other hubs)?

    Dubai has another advantage. It has made concessions to appeal more to families relocating to the region. e.g., allowing European supermarket chains to come in and even sell wine. Just with a few 'blue laws' that are far more tolerable than some nations in the region.

    Quoting Viscount724 (Reply 108):
    You can't do that for NZ or EK.

    Dubai would love to float EK. The current airline economic outlook doesn't allow Dubai to float as little as they would like for the $10 to $11 billion USD they desire. But EK has done detailed annual reports for a long time.


    Lightsaber



    Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
    User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17823 posts, RR: 46
    Reply 113, posted (2 years 7 months 2 weeks 2 days 2 hours ago) and read 6314 times:

    Quoting cmf (Reply 111):

    Much better to vilify Dubai by calling paid workers slaves and ignoring who built much of Heathrow under the disguise of military need and using wartime legislation for what was for civilian use

    Vilify rightly so. It isn't the 40s any more and the "they did it so we can too" is a terrible support for any argument, especially if most of the world has evolved decades beyond that type of thinking.

    Quoting cmf (Reply 111):

    Or all the bonds US taxpayers have taken out to build airports and terminals for US airlines.

    Dubai built an entirely new airport, and then shelved it, and built/plans to build multiple new terminals at DXB Nothing in the Western world matches the ease and ability of Dubai to build aviation infrastructure; China is the only other region I can think of that has a similar carte blanche.

    Quoting lightsaber (Reply 112):
    I wish more Western economies invested more in infrastructure. If the UK either built out LHR as a 24/7 3-runway airport or build the Thames Estuary airport with good ground transportation to various parts of London, then we wouldn't be worrying so much about EK. I have hypothesized for years that most of the impetus for the mid-east hub airline growth has been lack of 24/7 European hub expansion. e.g., the nightime flight ban at FRA is quite the gift to EK. Same with any European hub with night ops limits/curfew or constrained access (LHR, BER, FRA, MUC, CDG, etc.).

       EK's advantage has always been 1) Dubai's government's willingness to invest in and promote Dubai, and 2) other countries' willingness to handicap and even destroy their aviation infrastructure (ie curfews, ETS, Air India, etc) not direct subsidies to the carrier or any kind of fuel arrangement



    E pur si muove -Galileo
    User currently offlineRyanairGuru From Australia, joined Oct 2006, 5939 posts, RR: 5
    Reply 114, posted (2 years 7 months 2 weeks 2 days 2 hours ago) and read 6300 times:

    Quoting MaverickM11 (Reply 103):
    Without a local market, EK is just competing with QR, EY, and everyone else for the same traffic. With a local market it can charge a premium for network, schedule, and nonstops.

    But EK does have a local market! Why is it that countless foreign airlines from BA to UA to CX to SQ to LH to many I've probably never heard of fly to DXB? Because it is a viable end-of-line destination. Whether that traffic is inbound- or outbound-oriented I couldn't say, but there is definitely O&D demand.

    Quoting ElPistolero (Reply 106):
    The operation of a frequency beyond three flights per week by any one designated airline shall be subject to the approval of the aeronautical authorities of both Contracting Parties

    That is an incredible find.

    I went and read the treaty in case there was anything lurking in there which might suggest otherwise, and I agree with your assessment. EK could only fly more than 3 flights pw to Canada with the express approval of the Canadian Government regardless of whether the treaty allowed for 4 flights per week or 2000.




    http://www.centreforaviation.com/ana...liberalism-whos-got-it-right-22846

    I've just found this. It is basically the counter to Air Canada's "Emirates killed Australia" press release. It has a couple of minor deficiencies (eg EY fly to BNE 3x weekly, not daily) but overall seems a better balanced Aus-Can comparison than the one provided by AC. I don't know what the Centre for Aviation's policy stance is, but you can't argue with facts...

    "In Australia’s case, despite a 50% increase in Gulf airline capacity since 2005, Qantas’ international market share is almost identical to its level back then – just under 30%.

    The big change, because Qantas has to be competitive in its own right, is that Jetstar, with its lower cost base, has replaced Qantas on several marginally economic routes, maintaining the group’s place in the market. In other words, unable to rely on government protection, Qantas has successfully adapted to a more competitive international environment. This will stand it in good stead for the long term."

    Also the article makes it very clear that SQ was the airline which pioneered 6th Freedom ex Australia. It says that 25% of SQ's business is Australia--->Asia/Europe. I didn't realise it was that high, but it would come as absolutely no surprise whatsoever if true.

    For a bit of perspective, EK flies 2x daily to Brisbane and Perth, and SQ 3x winter/4x summer. Including conurbation, Perth has an effective population of 1.7 mn and Brisbane 2 mn (Wikipedia). Both are therefore pretty small by global standards...



    Worked Hard, Flew Right
    User currently offlinecmf From , joined Dec 1969, posts, RR:
    Reply 115, posted (2 years 7 months 2 weeks 1 day 23 hours ago) and read 6231 times:

    Quoting MaverickM11 (Reply 113):
    Vilify rightly so.

    I don't agree with how many of the foreign workers are treated. But neither do I agree with how many workers in many other countries are treated. But neither qualify as slaves. That is the kind of of labels some people like to use to "preset' an argument when they don't have good arguments.

    Quoting MaverickM11 (Reply 113):
    It isn't the 40s any more and the "they did it so we can too" is a terrible support for any argument, especially if most of the world has evolved decades beyond that type of thinking.

    No it isn't the 40's anymore. But what is different today? Governments are still pumping in billions of dollars (pick local currencies if you want) to support their industries so that isn't it. I'll tell you what is different. The well established airlines have a route network because of it. Now some people want to give them a second round of advantages.

    Even more hypocritical as many of the "established" countries are still providing plenty of support for their airlines. And if it isn't direct then there is plenty of indirect. UK has built a lot more airports with public money than any of the Arab countries. So don't trow stones when sitting in a glass house because a different countries government does what it should, help make the country better. But hey, it is much easier to claim someone else gets a lot of support you don't than accepting they actually have a better model.


    User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17823 posts, RR: 46
    Reply 116, posted (2 years 7 months 2 weeks 1 day 19 hours ago) and read 6136 times:

    Quoting cmf (Reply 115):
    . But neither do I agree with how many workers in many other countries are treated

    Such as?

    Quoting cmf (Reply 115):
    But neither qualify as slaves

    That's why I said near-slave labor. Google "Dubai" and "slave" and it's clear it's a current problem. Substitute "Britain" and "slave" and the results are 200+ years older.

    Quoting cmf (Reply 115):
    UK has built a lot more airports with public money than any of the Arab countries

    Nothing on the scale of Jebel Ali, the additional terminals at DXB, and certainly very little in the last few decades

    Quoting cmf (Reply 115):
    they actually have a better model.

    There's nothing different about EK's model.

    Quoting RyanairGuru (Reply 114):

    But EK does have a local market!

    I said they did  
    Quoting RyanairGuru (Reply 114):
    Also the article makes it very clear that SQ was the airline which pioneered 6th Freedom ex Australia. It says that 25% of SQ's business is Australia--->Asia/Europe. I didn't realise it was that high, but it would come as absolutely no surprise whatsoever if true.

    That wouldn't surprise me since they're essentially the original EK before there was EK, and now that the Kangaroo route has been so over competed, they're launching their low cost Scoot product on it, but that's another thread.



    E pur si muove -Galileo
    User currently offlineElPistolero From Canada, joined Feb 2012, 1039 posts, RR: 4
    Reply 117, posted (2 years 7 months 2 weeks 1 day 18 hours ago) and read 6080 times:

    Quoting MaverickM11 (Reply 113):

    Vilify rightly so. It isn't the 40s any more and the "they did it so we can too" is a terrible support for any argument, especially if most of the world has evolved decades beyond that type of thinking.

    As much as I agree with the sentiment, its a non-starter.

    We've seen environmental agreements flounder on the notion that developing nations should adopt philosophies that have evolved in the west. Developing countries point out that the developed world benefitted from the absence of these philosophies during their 'evolution'. They think they should be allowed to benefit themselves and let their own philosophy play catch up, rather than adopt the philosophy straight of the bat.

    I see the merits in both arguments, but suffice it to say, its not something one can hold solely against EK - its a common enough argument/trait/policy.


    User currently offlinelightsaber From United States of America, joined Jan 2005, 13529 posts, RR: 100
    Reply 118, posted (2 years 7 months 2 weeks 1 day 15 hours ago) and read 5960 times:
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    Quoting MaverickM11 (Reply 113):
    EK's advantage has always been 1) Dubai's government's willingness to invest in and promote Dubai, and 2) other countries' willingness to handicap and even destroy their aviation infrastructure (ie curfews, ETS, Air India, etc) not direct subsidies to the carrier or any kind of fuel arrangement

       The curfews have handed away a preferred set of flight times to hubbing competitors. EK/Dubai compensate with hotels, airport malls and bars, and other amenities. When a government tells business you will not to business at this time or as much at this location, the business often has to move some fraction elsewhere to stay competitive.

    It is amazing, for much of EK's growth was focusing on cargo which somehow slipped under the radar of their competition. I'm not aware of another regional airport (including India), where an import/export business could set up and have such easy access to cargo transportation. That amazes me for such a small population city.

    Quoting cmf (Reply 105):
    While I guess it could be grouped with logistics to some extent, regional offices is also very significant.

    I overlooked this good point.

    Quoting cmf (Reply 105):
    It should increase it. But there has already been a lot of investments, especially in the free trade zones.

    Agreed. At this juncture, Dubai needs to do what they can to increase investment since Dubailand is not receiving the investment that was planned. In order to grow the economy, Dubai must relax their bankruptcy laws to encourage investment in new business (such as aircraft MRO work at DWC).

    Quoting MaverickM11 (Reply 116):
    That's why I said near-slave labor. Google "Dubai" and "slave" and it's clear it's a current problem. Substitute "Britain" and "slave" and the results are 200+ years older.

    One area I appreciate the 'negative focus' on Dubai is improving work conditions. However, this is much like the 'illegal immigrants' in the US, they come here as their families benefit from the money. However, more regulation is needed (e.g., ensure more of the pay goes to the workers). The USA had 'company store' enterprises that were worse in the 1870s/1880s; that doesn't make it right.

    Lightsaber



    Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
    User currently offlinehohd From United States of America, joined May 2008, 454 posts, RR: 0
    Reply 119, posted (2 years 7 months 2 weeks 1 day 14 hours ago) and read 5896 times:

    EK success has made Western Airlines envious and jealous. However one point we have to concede. That DXB was built with workers with low wages and no rights. They do make more than they would in their own countries, however it is not more than 2 times the wages they would made back home. Even illegal immigrants in Europe or USA make more and have more rights. This is a known fact amongst all employers in Dubai.

    User currently offlineRyanairGuru From Australia, joined Oct 2006, 5939 posts, RR: 5
    Reply 120, posted (2 years 7 months 2 weeks 1 day 6 hours ago) and read 5783 times:

    Quoting lightsaber (Reply 118):
    I'm not aware of another regional airport (including India), where an import/export business could set up and have such easy access to cargo transportation. That amazes me for such a small population city

    The only two places I can think of are Singapore and Hong Kong.

    That isn't coincidence. Back when they were part of the British Empire those cities were given "entrepot" status (basically free trade zones), and developed into major trading hubs. This was pretty much the raison d'etre for both cities since the finance services which they are renowned for came on the back on this trade.

    Dubai decided that sounded like fun et bob t'oncle!

    Whatever other criticisms some might choose to throw at them, Dubai wasn't stupid.



    Worked Hard, Flew Right
    User currently offlinecmf From , joined Dec 1969, posts, RR:
    Reply 121, posted (2 years 7 months 2 weeks 16 hours ago) and read 5590 times:

    Quoting MaverickM11 (Reply 116):
    Such as?

    Way too many examples in the developing world. The conditions and camps in many Chinese factories are very similar to UAE. The actual terms for many workers in Caribbean, Central America, many places in South America and Africa as well. Plenty enough examples in the developed world. Want to look at the conditions for many maids and au pairs in US?

    Quoting MaverickM11 (Reply 116):
    That's why I said near-slave labor. Google "Dubai" and "slave" and it's clear it's a current problem. Substitute "Britain" and "slave" and the results are 200+ years older.

    Look up moon landing and conspiracy and it is clear it happened in Hollywood    Just because it gets a lot of hits in Google doesn't mean it is true. Nor does the lack of hits mean it isn't.

    As I said before there are plenty of problems in UAE. I do not like how many companies take their passports. I do not like the "camps" built to "house" them. I especially do not like how many managers, often being immigrant workers themselves, treat lower rank workers.

    But I am not under the illusion this is a UAE only problem. It is much bigger than that. Do you know that workers in UAE have rights to more breaks than hourly workers in Florida? Do you know they have more paid vacation than most US employees. Better financial rights if terminated too.

    It is pretty disgusting how many people think they are entitled to treat other people just because they pay them a bit of money. And UAE is neither best, worst and certainly not alone.

    Quoting MaverickM11 (Reply 116):
    Nothing on the scale of Jebel Ali, the additional terminals at DXB, and certainly very little in the last few decades


    Really. How much do nations of industrialized countries spend on various forms of subsidies? It hasn't stopped. Just moved to new areas. I hope you're not suggesting that every form of subsidy has a decade or two when it is OK and then everyone must stop  

    And no, you can't disqualify things just because they happened a few decades ago. Especially not if they are still used.

    Quoting MaverickM11 (Reply 116):
    There's nothing different about EK's model.


    Nothing? So they use the exact same model as UA, AA, DL, WN, B6?   


    User currently offlineairceo From Canada, joined Feb 2010, 98 posts, RR: 0
    Reply 122, posted (2 years 7 months 2 weeks 13 hours ago) and read 5538 times:

    I blogged about this today. I find the document lacks focus and for some reason (that I can't put my finger on) it seems to lack the usual polished quality we see applied to everything that comes out of EK HQ.

    I question this statement:

    Quote:
    Emirates goes head to head with more than 150 rival airlines serving Dubai International Airport

    If we're to clean up the list the numbers look about on par with CDG. ~100. Did anybody else look into this?

    The facts and figures on page 20 seem questionable:

    Quote:

    If Singapore Airlines operates 35% of flights out of SIN, how come Star Alliance’s share of that market is 30%?
    If Malaysia Airlines operates 28% of flights out of JUL, how come SkyTeam’s share of that market is only 5%?

    While frequencies matter (especially in congested/slot-restricted airports), ultimately market share is determined by seats. A seat count of the home carrier’s capacity in each market is conspicuously absent. Emirates’ smallest plane (in terms of passenger capacity) is its 3-class A330-200 which carries 237 passengers. The smallest plane likely to operate an international flight for any of the other carriers is probably about half that – around 120. This holds true even for Singapore Airlines and Cathay Pacific – though both are also all-wide body carriers like Emirates, they both have subsidiaries that operate narrow bodies and Emirates seems to want to count those operations too.


    Link: http://airceo.com/2012/05/emirates-talks-subsidies/

    Cheers!



    blogger at airceo | reach me: @airceo or fly@airceo.com
    User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17823 posts, RR: 46
    Reply 123, posted (2 years 7 months 2 weeks 13 hours ago) and read 5523 times:

    Quoting cmf (Reply 121):
    Way too many examples in the developing world. The conditions and camps in many Chinese factories are very similar to UAE. The actual terms for many workers in Caribbean, Central America, many places in South America and Africa as well.

    None of those places had a purse filled with oil money; they're poor.

    Quoting cmf (Reply 121):
    Look up moon landing and conspiracy and it is clear it happened in Hollywood

    Not quite the same and you know it.

    Quoting cmf (Reply 121):
    How much do nations of industrialized countries spend on various forms of subsidies?

    There's nothing quite like Dubai's spending on infrastructure. It's a compliment. Any carrier would sell its soul to have their government spend on facilities like Dubai.

    Quoting cmf (Reply 121):
    Nothing? So they use the exact same model as UA, AA, DL, WN, B6?

    Nothing. It's a hub and spoke like UA, AA, DL, BA, AF, SQ, etc etc etc...except probably more peaked.



    E pur si muove -Galileo
    User currently offlineTdan From United States of America, joined Nov 2011, 463 posts, RR: 3
    Reply 124, posted (2 years 7 months 2 weeks 12 hours ago) and read 5515 times:

    Quoting MaverickM11 (Reply 123):

    None of those places had a purse filled with oil money; they're poor.

    Careful, Mav. Dubai doesn't have purses filled with oil money. What it did have was access to nearly limitless cheap credit in order to build anything the emirate wanted. While this lasted, Dubai built as much as it possibly could until big brother with purses full of oil money (Abu Dhabi) came and bailed them out. As a result, Dubai is a cosmopolitan center for trade, finance and tourism with a large and growing local O&D population for which it can charge a premium.

    Quoting MaverickM11 (Reply 123):

    Nothing. It's a hub and spoke like UA, AA, DL, BA, AF, SQ, etc etc etc...except probably more peaked.

       EK=SQ. Why don't more people hate on SQ as much as they do EK? They're the same thing! And both are completely legitimate, profitable carriers that make a living on high yield local traffic and a high volume of transit traffic. TK is quickly growing into the same mold as well.

    Quoting cmf (Reply 111):

    Much better to vilify Dubai by calling paid workers slaves

    Much of the labor in Dubai (and the UAE for that matter) is increasingly legitimate due to outside pressures to increase transparency in everything, but this was not always the case, particularly in the beginning of the building boom. Additionally, there is a seedy underworld that is thriving in Dubai. From indentured servitude (near slave labor) to organized crime, Dubai has it all



    We will ride this thunderbird, silver shadows on the earth, a thousand leagues away our land of birth... -Captain Bruce
    User currently offlineElPistolero From Canada, joined Feb 2012, 1039 posts, RR: 4
    Reply 125, posted (2 years 7 months 2 weeks 9 hours ago) and read 5427 times:

    Quoting airceo (Reply 122):
    If we're to clean up the list the numbers look about on par with CDG. ~100. Did anybody else look into this?

    Interesting read. I wouldn't even know where to look.

    Quoting airceo (Reply 122):
    If Singapore Airlines operates 35% of flights out of SIN, how come Star Alliance share of that market is 30%?

    Very interesting. I didn't give it much thought the first time around. I can only guess it has something to do with the fact that LCCs have 27% market share, and theres a large number of non alliance carriers in the region (I m thinking specifically of Indian ones).

    They've provided sources - you could double check the numbers.

    Quoting airceo (Reply 122):
    If Malaysia Airlines operates 28% of flights out of JUL, how come SkyTeam%u2019s share of that market is only 5%

    If you mean KUL, what does MH's share have to do with SkyTeam? MH isn't a part of SkyTeam.

    Valid questions all the same.


    User currently offlinelightsaber From United States of America, joined Jan 2005, 13529 posts, RR: 100
    Reply 126, posted (2 years 7 months 2 weeks 6 hours ago) and read 5355 times:
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    Quoting Tdan (Reply 124):
    Dubai doesn't have purses filled with oil money.

    Hence why they built something else. The first big investment being the artificial port. A large chunk of Dubai's prior oil money was traded to make infrastructure. Unlike more than a few other nations. Dubai, as you noted, also leveraged. Not for luxury, but to become 'something.' The fact part of 'Dubai inc.' had to default?   

    What amazes me is the compromises Dubai made to become a 'more acceptable destination' that their neighbors still haven't.

    Quoting RyanairGuru (Reply 120):
    The only two places I can think of are Singapore and Hong Kong.

    That isn't coincidence. Back when they were part of the British Empire those cities were given "entrepot" status (basically free trade zones), and developed into major trading hubs. This was pretty much the raison d'etre for both cities since the finance services which they are renowned for came on the back on this trade.

    Dubai decided that sounded like fun et bob t'oncle!

    Ok, I have no idea what bob t'oncle is, but Dubai did copy the two most successful analogous models from the British Empire. By lowering the bars to trade and travel, it has prospered. And catered to foreign preferences far more than its neighbors.

    Quoting Tdan (Reply 124):
    Much of the labor in Dubai (and the UAE for that matter) is increasingly legitimate due to outside pressures to increase transparency in everything, but this was not always the case, particularly in the beginning of the building boom. Additionally, there is a seedy underworld that is thriving in Dubai. From indentured servitude (near slave labor) to organized crime, Dubai has it all

    Sad but true. But it has made itself more than it was 20 years ago.

    Lightsaber



    Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
    User currently offlineRyanairGuru From Australia, joined Oct 2006, 5939 posts, RR: 5
    Reply 127, posted (2 years 7 months 2 weeks 4 hours ago) and read 5330 times:

    Quoting Tdan (Reply 124):
    From indentured servitude (near slave labor) to organized crime, Dubai has it all

    At this rate they will be like Hong Kong within five years  

    In all serious though, as unfortunate as this is you only need to look at any city in the "developing" world (using the term in the loosest possible way) and it is the same situation: HK, Shanghai, Manila, Jakarta, Bangkok...

    Quoting lightsaber (Reply 126):
    I have no idea what bob t'oncle

    Sorry, it's French for "Bob's your uncle".



    Worked Hard, Flew Right
    User currently offlineairceo From Canada, joined Feb 2010, 98 posts, RR: 0
    Reply 128, posted (2 years 7 months 2 weeks 3 hours ago) and read 5309 times:

    Quoting ElPistolero (Reply 125):
    Interesting read. I wouldn't even know where to look.

    I've compiled a list based on syscanner.net at CDG rings in at 99 non-cargo carriers.

    Quoting ElPistolero (Reply 125):
    Very interesting. I didn't give it much thought the first time around. I can only guess it has something to do with the fact that LCCs have 27% market share, and theres a large number of non alliance carriers in the region (I m thinking specifically of Indian ones).

    Well the number attributed to SQ is a % of the total rotations irrespective of type of carrier - at least that's how it's presented... How then can the Star Alliance number be less? Odd.

    Quoting ElPistolero (Reply 125):
    They've provided sources - you could double check the numbers.

    Sources may be listed but getting that info is not that easy.

    Quoting ElPistolero (Reply 125):
    If you mean KUL, what does MH's share have to do with SkyTeam? MH isn't a part of SkyTeam.

    Valid questions all the same.

    Really dropped the ball here. JUL was a typo and MH-SkyTeam was a pre-coffee thought.  

    airceo



    blogger at airceo | reach me: @airceo or fly@airceo.com
    User currently offlineElPistolero From Canada, joined Feb 2012, 1039 posts, RR: 4
    Reply 129, posted (2 years 7 months 2 weeks 3 hours ago) and read 5281 times:

    Quoting airceo (Reply 128):

    Yes, I guess a lot of that information is sold by the sources, rather than available for free. The SQ numbers look very odd indeed. I don't doubt the veracity of your numbers regarding CDG - I really wouldn't know where to look (short of manually counting it on the wiki page). Good catches anyhow. I agree with your blog posting - as is often the case with EK, old positions have simply become more entrenched. Shame really - its amazing how difficult it's become to separate fact from fiction.


    User currently offlineANCsupercub From United States of America, joined May 2007, 140 posts, RR: 0
    Reply 130, posted (2 years 7 months 2 weeks 2 hours ago) and read 5268 times:

    Quoting connies4ever (Reply 24):
    The Arthur Andersen &* Associates comparison is quite valid - Enron was a shell game but AA & A said it was a solid investment. Standard & Poor's rated Goldman Sachs as a solid investment only months before it collapsed. If you think these organisations are not prostituted to the fees they receive, you're smoking something. Of course PWC would say what EK wanted.
    Quoting L410Turbolet (Reply 36):
    As was Arthur Andersen part of the Big Six prior to the Enron fisaco.

    It is not fair to say that because of Enron, you cannot trust an auditor opinion. First, it is important to note that the majority of Arthur Andersen's employees were ethical, but were brought down by the Houston office. Second, the auditin