Ok, I think it is time to step in because they are a lot of misconceptions and moreover a sense of "unconscious" racism, you know "towel heads" are doing better than us (white people). Got that diffuse feeling any way. I might be mistaken (hope so).
|Quoting B727fan (reply 0):|
I wonder if EK or any of the other wealthy Arab states in the Persian Gulf region would survive and do well after their natural resources (well, OIL is their only main export) runs out
If their oil reserves can last for the next 100 years, It is not today the eve of the demise of these airlines. In 100 years from now, with most of oil reserves depleted , there will be no AF
|Quoting B727fan (reply 2):|
And also, the point I was making is that these airlines, are mainly subsidized by their governments whose sole revenue rely on oil and natural gas. Yes true, when their oil runs out, the price of gasoline will quadruple, but do you think tourists will still fly these carriers to GCC countries? What will be the attractions? Industries producing ordinary product
Unless you have proof to support the above statement on subsidies, I will advice you to make this kind of blank statement . I foil runs out , I can assure that price of oil will not quadruple but increase at least by 10 fold. Transportation will be so expensive and the world economic crisis following the depletion of oil reserves will stop any inflow of tourists. do not think for the time being that tourists are flocking in a great number in these regions, however, in their long term strategic plan , The Emirates are building such an infrastructure and the Gulf region (including Oman and Qatar) are trying to diversify their portfolio of revenues on inve4sting on tourism.
Shall I remind you that Alitalia and Olympic Aw both heavily subsidized airlines are on the verge of bankruptcy, shall I remind you also that WN
are making "insolent" profits whereas US , UA
and other legacy carriers are fighting to remain afloat. Shall I conclude that WN
(heavy losses for a company that "do not pay its fuel") are paying their fuel. First they must buy it from the refineries and I do not know That ARAMCO and other oil companies are such charity trusts to give away jet fuel.
and the other GCC carriers buy their jet fuel either on the spot price (London Petroleum Exchange, NYNEX etc..) or forward contracts . They can hedge it or not. Let me remind you that hedging necessitates a major cash investment (in the form of margins to be deposited) and therefore, there is no surprise that cash rich airlines can hedge their future jet fuel purchases (WN for example) . You know what makes the difference :taxes (sales, value added, excise, duty etc...) that renders jet oil (or any fuel) more expansive in one country than the other. My advice to you would be to ask your senator to urge Mr. Bush to eliminate all direct and indirect taxes on the acquisition of fuel.
What will be the attractions? sandy beaches, the desert, golf courses, camel and horse races, F1 prizes, scuba diving , falconry, car rallies etc...
|Quoting Aerofan (reply 8):|
do we really believe that EK or Eithad pay market prices for their fuel? Hedging or no hedging I would guess that their cost structures are remarkably different from all other carriers and thus one of the major reason for their success. What did they hedge at? U$0.10 or thereabouts? Let the oil disappear and let's see what happens
Oh yes they do , see my comment above.
|Quoting B727fan (reply 14):|
So When the oil runs out, will the multi national firms stay in UAE? Will the tourism continue to thrive when other Emirates are lacking sufficient income? Lets face the fact, it will very hard to catch up with Dubai at this point for any of the other Emirates. (For instance whats Sharjah going to do?) So after oil, the main wealthy Emirate will no doubt be Dubai, and I think it will face tremendous challenges keeping the path unless other Emirates can stay on their feet. Sure, I realize this is a theory for now. Thats all, and I certainly do not mean to start a war here! It was a question based on my own Experience in the UAE and wondered what would happen after oil! Thanks
Unless the multinationals are related to the oil industry they are bound to leave, but let us take for example DUBAI MEDIA CENTER, they will remain there, DUBAI financial center will certainly remain there, all offshore companies will stay there. The master plan devised by the ruling family is that DXB
to become a major financial and tourists center in the region a la Singapore or a la Monaco.... The windfall experienced by DXB
will profit to the less fortunate emirates such as Sharjah, Fujeirah, and Ras El Kaimah.
Now as all companies in general and airline companies in particular are subject to cycles, expansion, contraction etc. It is the expansion of LCC vis a vis the legacy carriers , before it was the legacy vis a vis railway companies etc..
like other airlines is prone to face difficulties , let us envisage for example a SARS or a chicken flue epidemic in the Far East,( SQ
were adversely affected by the SARS epidemic a couple of years ago) ,problems with Iran, unstable Saudi Arabia , all of these could affect their operations etc....
I have heard that in the next, few years more than 100 Mio Chinese will travel abroad as tourists, guess which airline companies will take advantage of this surge in Chinese tourism . Long term strategy is a key to future success and EK
,CX and JL
are capitalizing (already) on that.