Tangowhisky
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Analysts Warn Middle East Will Face Overcapacity

Thu Sep 14, 2006 1:04 pm

Analysts are warning that the Middle East region is facing a potentially-damaging burden of over-capacity combined with continuing inefficiency resulting from heavy air transport regulation.

Fair Quote:
A study by consultancy Booz Allen Hamilton claims that Middle Eastern states must accelerate national deregulation activity and co-ordinate their long-term air transport planning in order to prevent over-investment in unnecessary airport and fleet capacity.

While the study, Mastering the Challenges of the Middle East Aviation System, accepts that the Middle East region is growing rapidly it says that planned investments at ten airport locations are designed to provide for an additional 320 million passengers by 2012.

"However the region will likely fall short of such growth, even if it meets its expected growth rate of about 7% per year", it states. It adds that several programmes are taking place in areas of close proximity, and that this could result in overlapping catchments and cannibalisation of demand.

Despite evidence that airlines "capacity management in the Middle East is relatively poor" the study says that load factor is, on average, around seven points lower than in Europe and Asia the region's carriers are investing heavily in fleet expansion. Emirates, Etihad Airways and Qatar Airways account for most of the new aircraft on order in the area.

The projected increase in fleet capacity, says the study, is "well ahead" of demand and "bears the risk of intense competition", driving down aircraft utilisation and performance efficiency.

"These investment programmes pose serious risks of unhealthy competition and unexpected over-capacity that the region must address", it says, warning that government backing in many cases will prevent normal market forces from reducing excess capacity in the near term.

Over-regulation, it adds, is leading to low efficiency and low quality within both the aviation system and its infrastructure and this, in turn, is generating "serious restrictions" on sustainable, self-funding growth.

"Even though some aviation markets, such as Dubai, have introduced open sky policies and released foreign-ownership limitations, the aviation system remains heavily regulated by government airport and airline ownership, restricted traffic rights, selected traffic right allocation, and price restrictions", it says.

"As a result the Middle East aviation system has clear cost and efficiency disadvantages which lead to increased prices and subsidies. Heavy regulation also limits the adoption of new aviation business models, such as low-cost carriers, to the detriment of faster regional tourism development and consumer benefit."

It says that Middle Eastern countries should align air transport policy with a broader agenda of national economic growth. Governments need to accelerate liberalisation programmes, open their markets to foreign investors and competitors, and co-ordinate their efforts with other Middle Eastern states in order to avoid potential problems.
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centrair
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RE: Analysts Warn Middle East Will Face Overcapacity

Thu Sep 14, 2006 1:49 pm

Could you post a link to the entire document/article?
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jetjack74
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RE: Analysts Warn Middle East Will Face Overcapacity

Thu Sep 14, 2006 4:07 pm

Of course. In a region that is so volitile and has never been a huge draw in traffic, is it any wonder that the threat of overcapacity is looming. These clowns ordering insane amounts of aircraft to trump the likes of western carriers. What is Emirates going to do with 45 A380's and all the other aircraft they have on order. Europeans going to and from Asia/Australasia don't want to stop in DXB, JED, or DOH in order to get to SYD or LHR when the get there n/s. These company's are owned by these shieks, princes who thing running an airline is easy money. Well, we'll see how many 2nd-hand aircraft flood the market over the next few years.
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qantas787
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RE: Analysts Warn Middle East Will Face Overcapacity

Thu Sep 14, 2006 4:11 pm

Reading this thread would make Geoff Dixon smile I should think.
G'day
 
ikramerica
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RE: Analysts Warn Middle East Will Face Overcapacity

Thu Sep 14, 2006 4:29 pm

Quoting Tangowhisky (Thread starter):
"These investment programmes pose serious risks of unhealthy competition and unexpected over-capacity that the region must address", it says, warning that government backing in many cases will prevent normal market forces from reducing excess capacity in the near term.

I've been saying this for a long time. The government backing, whether overt or covert, distorts the impact of over expansion on the carriers themselves, but not on their competitors around the world.

Quoting Qantas787 (Reply 3):
Reading this thread would make Geoff Dixon smile I should think.

It's also why the Australian government isn't going to budge any time soon. They are not dumb, and know that with over capacity and government involvement, the middle eastern carriers will saturate Australia to the detriment of having other options. People ask why QR should have to prove a route makes sense? The answer is, capacity dumping is likely in the near term and while it can have short term benefits for the flying public, the long term repercussions can be dire...
Of all the things to worry about... the Wookie has no pants.
 
Lumberton
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RE: Analysts Warn Middle East Will Face Overcapacity

Thu Sep 14, 2006 7:03 pm

Many of the threads on PPRUNE discuss difficulties in recruiting and retaining pilots in the Middle East. Although annecdotal, where there's smoke....

Also, with the announcement of RAK, that would make 13 (per Airfleets) separate airlines in the UAE alone! It's almost like every large city in Texas having an international airline.  duck 
"When all is said and done, more will be said than done".
 
Motorhussy
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RE: Analysts Warn Middle East Will Face Overcapacity

Thu Sep 14, 2006 8:16 pm

I hope they got paid well for figuring this all out.... ya think?

MH
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ltbewr
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RE: Analysts Warn Middle East Will Face Overcapacity

Thu Sep 14, 2006 9:44 pm

There are a number of problems with this developing overcapacity by the huge and rapid growth in Middle Eastern/Persian Gulf States based airlines, not just for these airlines, but others elsewhere in the world.
Due to lower fuel, financing, and to some extent labor costs they can offer cheaper fares. They control for a number of years their own considerable oil resources. Their investors, which in part are the governments themselves, do not have the short term profit needs to satisfy them. That means for many EC and some Asisn airlines, they will have competitive pressures put on them, including pressure on fares.
By hiring people from low income countries (South Asia, Ex-soviet countries, Eastern Europe), they save a lot of money on flight staff. Yes, they may face shortages of access to sufficient pilots and that may be a limiting issue.
Due to their lower overall costs, they may be able to offer fares that despite the stopovers, may force lower fares on EC or Asian based airlines.
They still face an issue that many do not want to stop in a 3d country, especially one that is in the Middle East due to security and terror risks.
Many also don't desire to nor want to support Middle Eastern governments, the dominate Islamic religious faith there or with some countries, their treatment of their citizens, especially women or the general undemocratic states they tend to be. These are intangible issues that these Middle Eastern airlines are not seeing.
 
cloudyapple
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RE: Analysts Warn Middle East Will Face Overcapacity

Thu Sep 14, 2006 10:26 pm

We dont need analysts to tell us the middle east is going to be over capacity in the near future. There are at least 3 airlines with unlimited cash operating and all expanding aggressively. Amongst the 3 of them they have 50000 seats on order and they are going to buy more. The region is going to be the world's aviation hub sucking in all Oz/Asia/Africa-Europe traffic. This growth is not going to be sustainable in the long run and they will certainly drag some of the weaker European/Asian/African/Oz carriers into the oblivion.
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supa7E7
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RE: Analysts Warn Middle East Will Face Overcapacity

Thu Sep 14, 2006 11:05 pm

It all depends on India + China growth.... how much and who gets it.

Big markets will be flown high over the Middle East.

Asia-Africa traffic however... that is a strong advantage for the Middle East.
"Who's to say spaceships aren't fine art?" - Phil Lesh
 
jaysit
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RE: Analysts Warn Middle East Will Face Overcapacity

Thu Sep 14, 2006 11:28 pm

Quoting Jetjack74 (Reply 2):
Europeans going to and from Asia/Australasia don't want to stop in DXB, JED, or DOH in order to get to SYD or LHR when the get there n/s

Tell that to the millions of Europeans who take EK/QR/GF to SE Asia, Australia, India and Africa. And no one transits in JED to get anywhere. Except, perhaps, Mecca.

Quoting LTBEWR (Reply 7):
They still face an issue that many do not want to stop in a 3d country, especially one that is in the Middle East due to security and terror risks.

How is Dubai a security risk? You're safer in Dubai than you probably are at London Heathrow.

Quoting Cloudyapple (Reply 8):
This growth is not going to be sustainable in the long run and they will certainly drag some of the weaker European/Asian/African/Oz carriers into the oblivion.

Well, none of the European carriers, except BA and VS fly to Australia anymore. The Oz traffic had already been diverted to the SE Asian carriers with their superior service and lower fares. For smaller EU, African and Asian carriers to survive, they'd have to cater to nitch markets.
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777way
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RE: Analysts Warn Middle East Will Face Overcapacity

Fri Sep 15, 2006 1:35 am

Quoting Jaysit (Reply 10):
How is Dubai a security risk? You're safer in Dubai than you probably are at London Heathrow.

Al Qaeda have issued latest threat to target Gulf States for their pro-America policy.
 
jaysit
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RE: Analysts Warn Middle East Will Face Overcapacity

Fri Sep 15, 2006 4:05 am

Quoting 777way (Reply 11):
Quoting Jaysit (Reply 10):
How is Dubai a security risk? You're safer in Dubai than you probably are at London Heathrow.

Al Qaeda have issued latest threat to target Gulf States for their pro-America policy.

But that's nothing new.

Those threats were issued by Al Qaeda years ago.

Plus, remember that the Emirates have perfectly normal relations with Iran and the Saudis, who realize the need for a pressure valve for their deprived citizens.
Atheism is Myth Understood.
 
PlaneHunter
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RE: Analysts Warn Middle East Will Face Overcapaci

Fri Sep 15, 2006 4:16 am

Quoting Jetjack74 (Reply 2):
In a region that is so volitile and has never been a huge draw in traffic, is it any wonder that the threat of overcapacity is looming.

"Has never been" doesn't count any more. And which parts of the regions are volatile? Don't forget, the UAE is different from Iraq, Iran or Lebanon.

Quoting Jetjack74 (Reply 2):
These clowns ordering insane amounts of aircraft to trump the likes of western carriers. What is Emirates going to do with 45 A380's and all the other aircraft they have on order.

Calling these people "clowns" doesn't change the fact that these airlines are successful, especially EK, and cause headaches for many "Western carriers".

Quoting Jetjack74 (Reply 2):
Europeans going to and from Asia/Australasia don't want to stop in DXB, JED, or DOH in order to get to SYD or LHR when the get there n/s.

So how do Europeans then fly to SYD? By chartering a personal B777?
Of course passengers want to stop in DXB or DOH, that's why these airlines have grown massively in the past years. Check EK's network and find out which destinations are connected nonstop with each other...
Timetable's here: www.emirates.com

Quoting Jetjack74 (Reply 2):
These company's are owned by these shieks, princes who thing running an airline is easy money.

"These shieks" are usually well educated and they also employ managers from all over the world. And "easy money" may sound like a nice and comfortable reason for the success, but there's a bit more behind it...

Quoting Jetjack74 (Reply 2):
Well, we'll see how many 2nd-hand aircraft flood the market over the next few years.

Considering that certain US carriers are in serious trouble, there could be quite some aircraft flooding the market soon...

Quoting LTBEWR (Reply 7):
They still face an issue that many do not want to stop in a 3d country, especially one that is in the Middle East due to security and terror risks.

Most people can distinguish between Iraq and the UAE.

Quoting LTBEWR (Reply 7):
Many also don't desire to nor want to support Middle Eastern governments, the dominate Islamic religious faith there or with some countries, their treatment of their citizens, especially women or the general undemocratic states they tend to be.

See above. Saudi-Arabia or Iran are different from the UAE.

Quoting LTBEWR (Reply 7):
These are intangible issues that these Middle Eastern airlines are not seeing.

They can't see what's not there.

Quoting Jaysit (Reply 10):
Tell that to the millions of Europeans who take EK/QR/GF to SE Asia, Australia, India and Africa. And no one transits in JED to get anywhere. Except, perhaps, Mecca.

 checkmark 

Quoting Jaysit (Reply 10):
How is Dubai a security risk? You're safer in Dubai than you probably are at London Heathrow.

 checkmark 

Quoting 777way (Reply 11):
Al Qaeda have issued latest threat to target Gulf States for their pro-America policy.

The UAE is known to be neutral. We all know which countries are meant with that threat.


PH
Nothing's worse than flying the same reg twice!
 
74472
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RE: Analysts Warn Middle East Will Face Overcapacity

Fri Sep 15, 2006 4:50 am

Maybe EK can put all of their A380's on Europe/Australia?

Maybe I could fly from London to Hong Kong via DXB and save 20 quid and lose 10 hours ?

Good luck to the middle eastern carriers. Seriously, who cares if in 5 years they're flying around alot of half empty aircraft. It doesn't matter to them financially does it !!
 
jacobin777
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RE: Analysts Warn Middle East Will Face Overcapaci

Fri Sep 15, 2006 5:19 am

Quoting Jetjack74 (Reply 2):
Of course. In a region that is so volitile and has never been a huge draw in traffic

are you speaking out of your bum or are you speaking using facts....?

This is taken directly from the IACO..

"Having shown some resilience to geopolitical tensions and conflicts, the Middle East
economy is expected to maintain a higher than world average growth through to the end of the forecast
period. The GDP for the region is expected to increase at an average annual rate of 4.5 per cent for the
2004-2010 period and 3.5 per cent for the period 2010-2020."

"Scheduled passenger traffic (in PKPs) of the airlines of the Middle East region increased
at an average annual rate of 9.1 per cent over the 1994-2004 period, substantially higher than the world
average. After a slowdown in 2001, traffic rebounded and increased by 9.7 per cent in 2002, 12.7 per cent
in 2003 and 23.8 per cent in 2004.
3.2.2 Scheduled passenger traffic for the airlines of the Middle East region is expected to grow
by 12 per cent in 2006 and 8.8 per cent in 2006. These rates reflect an expected good economic
performance in the region. The long term average annual growth rate to the year 2015 is anticipated to be
6.4 per cent, the highest growth among all regions."**

**-IACO meeting-May 3-6, 2006

Quoting Jetjack74 (Reply 2):
What is Emirates going to do with 45 A380's and all the other aircraft they have on order.

who says they are going to use all the planes? maybe they will lease them out......which is a possibility...

the other planes coming in will be for fleet replacement as well as expansion..

getting the 787-10 for example would replace the older 772's

Quoting Jetjack74 (Reply 2):
Europeans going to and from Asia/Australasia don't want to stop in DXB, JED, or DOH in order to get to SYD or LHR when the get there n/s.

gee..really? is that why the Australian govt. doesn't QR coming in because it is afraid that QR would increase capacity to on the Kangaroo route? Why is Australia one of EK's most lucrative routes? The local population fills those seats up?

when was the last time a carrier offered Europe-SYD-Europe nonstop?

Quoting Jetjack74 (Reply 2):
These company's are owned by these shieks, princes who thing running an airline is easy money

right..big boys with big toys... sarcastic 

EK's books are open for all to see......EK's Clark struck great deals 20 years ago with many countries because no one thought EK would be competitive in 20 years....

Quoting LTBEWR (Reply 7):
By hiring people from low income countries (South Asia, Ex-soviet countries, Eastern Europe), they save a lot of money on flight staff.

are you talking about EK? EK has a very large international staff/FA's/pilots

Quoting LTBEWR (Reply 7):
They still face an issue that many do not want to stop in a 3d country, especially one that is in the Middle East due to security and terror risks.

Is that why UA has decided to start IAD-KWI? When was the last time there was a "security and terror risk" in a Middle East country? Last I heard, it was all happening in European countries/United States...

Quoting LTBEWR (Reply 7):
Many also don't desire to nor want to support Middle Eastern governments, the dominate Islamic religious faith there or with some countries, their treatment of their citizens, especially women or the general undemocratic states they tend to be. These are intangible issues that these Middle Eastern airlines are not seeing.

keep your brilliant political comments out of this (so he says in a sardonic matter).....almost all Asian, European and even the United States have business/economic ties with Middle Eastern Countries such as Egypt, Saudi, Jordan, Qatar, etc....
"Up the Irons!"
 
antiuser
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RE: Analysts Warn Middle East Will Face Overcapacity

Fri Sep 15, 2006 5:35 am

Quoting LTBEWR (Reply 7):
Many also don't desire to nor want to support Middle Eastern governments, the dominate Islamic religious faith there or with some countries, their treatment of their citizens, especially women or the general undemocratic states they tend to be. These are intangible issues that these Middle Eastern airlines are not seeing.

Don't know much about the UAE, do you? It's specifically stated in their constitution that before the law, men and women are equal and enjoy the same rights.

Quoting Lumberton (Reply 5):
Although annecdotal, where there's smoke....

... there's mirrors? Big grin
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jaysit
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RE: Analysts Warn Middle East Will Face Overcapacity

Fri Sep 15, 2006 6:03 am

Quoting 74472 (Reply 14):
Maybe I could fly from London to Hong Kong via DXB and save 20 quid and lose 10 hours ?


You could lose at most 3.5 hours. And probably save a lot, given that bucket shops in London can give you a fare in any class of travel on EK for less than on BA or CX. And while you'd be insane to go via the MidEast to get to HKG especially since the route is so competitive with some great airlines serving it, remember its not just the major cities in Asia like HKG that EK targets.

You get one stop connectivity to all Australian cities, Asian cities like Jakarta, KL, Manila, Nagoya, Sapporo, virtually all of the subcontinent and East Africa. And you could get there on new aircraft with great service. And while I'd rather get to Singapore or Mumbai or Bangkok non-stop from London, a lot of travellers don't care about a transit stop as long as they save money. Throw in 600 movies on a kick-ass IFE system, and you get the masses numb to an extra few hours of travel time.

Besides, don't underestimate Dubai's growth as a destination. Its become the destination of choice for the rapidly growing numbers of the new rich in India, Russia and China. For a lot of these people, Dubai with all its new bling bling is a perfectly acceptable version of Vegas, LA and NYC without all the messiness of having to get a tourist visa and flying for 12-20 hours.
Atheism is Myth Understood.
 
kiramakora
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RE: Analysts Warn Middle East Will Face Overcapacity

Fri Sep 15, 2006 6:14 am

Quoting Jaysit (Reply 12):
Plus, remember that the Emirates have perfectly normal relations with Iran and the Saudis, who realize the need for a pressure valve for their deprived citizens.

Haha. So true.

Quoting Antiuser (Reply 16):
Don't know much about the UAE, do you? It's specifically stated in their constitution that before the law, men and women are equal and enjoy the same rights.

I would not go on to state that UAE is a bastion of equality. Treatment of non-Gulf citizens, and expats from certain Western countries in particular jobs is very sad and dispecable.
 
ltbewr
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RE: Analysts Warn Middle East Will Face Overcapacity

Fri Sep 15, 2006 6:21 am

I agree that a number of the Persian Gulf states are socially reasonable, unlike Iran or Saudi Arabia. Still many have very dumb and prejudical stereotypes of the region, especially Americans, and see it as all a big, anti-Israeli place.
The UAE, Dubai, and several other countries there have stable and well run governments with good human and personal rights, good educational systems and are attracting many rich tourist in the region and elsewhere for their high class standards and reasonable social attitudes.
I would also agree that the security of airports in that region have very high world class standards due the risks they face from al-Queda types there, perhaps better than many EC and USA airports.
As to UA planning to serve Kuwait, that is probably to service the large numbers of oil, construction, project managers and other advisers and workers from the USA in that region, especially using Kuwait as their base of operations or to go into Iraq from there to their contracts in Iraq. The demand and income and relatively low risk makes it a good decision for an American based airlines to serve there.
 
MaverickM11
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RE: Analysts Warn Middle East Will Face Overcapacity

Fri Sep 15, 2006 6:29 am

Quoting Tangowhisky (Thread starter):
Analysts are warning that the Middle East region is facing a potentially-damaging burden of over-capacity

Uhh....duh! Are these same analysts predicting an overcapacity situation in the US in 2002?
E pur si muove -Galileo
 
jaysit
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RE: Analysts Warn Middle East Will Face Overcapacity

Fri Sep 15, 2006 6:39 am

Quoting Kiramakora (Reply 18):
I would not go on to state that UAE is a bastion of equality. Treatment of non-Gulf citizens, and expats from certain Western countries in particular jobs is very sad and dispecable.

You mean non-Western countries. Yes, the labor laws in Dubai viz a viz the subcontinental and SE Asian blue collar labor force are nasty. And, yet, millions still apply for jobs there. Lately, there has been some action on behalf of the Emirati government to put some teeth into their laws in apprehending thuggish employers who often refuse to pay their "slave" laborers and keep them in virtual bondage. It appears that the slothful Indian government finally woke up from its slumber and made a few noises which led to the UAE to do the minimum needed to alter their laws. The UAE also know quite well that they depend heavily on cheap labor from their catchment area, and, thus, don't want to eliminate the incentive of making money. With the way the UAE is building all sorts of bizarre stuff, they will only need more expat blue collar workers, not less.
Atheism is Myth Understood.
 
Gr8Circle
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RE: Analysts Warn Middle East Will Face Overcapacity

Fri Sep 15, 2006 6:41 am

Given the above situation, how do Boeing and Airbus handle this....? After all, a lot of the orders that they both boast about are from airlines in the Middle East....if a collapse of even a small magnitude does occur down the line, that could mean huge cancellations of orders......where would that leave A and B...?
 
Tangowhisky
Topic Author
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RE: Analysts Warn Middle East Will Face Overcapacity

Fri Sep 15, 2006 6:57 am

Quoting Gr8Circle (Reply 22):
Given the above situation, how do Boeing and Airbus handle this....? After all, a lot of the orders that they both boast about are from airlines in the Middle East....if a collapse of even a small magnitude does occur down the line, that could mean huge cancellations of orders......where would that leave A and B...?

If it is the economy you are referring to, when was the last time you heard of an economic recession in Saudi Arabia or UAE?

Quoting MaverickM11 (Reply 20):
Uhh....duh! Are these same analysts predicting an overcapacity situation in the US in 2002?

Actually, quite a bit of planes did get parked in the desert starting in 2002.
Only the paranoid survive
 
antiuser
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RE: Analysts Warn Middle East Will Face Overcapacity

Fri Sep 15, 2006 7:05 am

Quoting Kiramakora (Reply 18):
I would not go on to state that UAE is a bastion of equality. Treatment of non-Gulf citizens, and expats from certain Western countries in particular jobs is very sad and dispecable.

Well, that'll vary from job to job, city to city and person to person... a friend of mine just returned from a 4-month assignment in Dubai and she said the people there were very nice and polite. Of course the UAE aren't a bastion of equality, but they're far from being a hard-line islamic nation.
Azzurri Campioni del Mondo!
 
lehpron
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RE: Analysts Warn Middle East Will Face Overcapacity

Fri Sep 15, 2006 7:22 am

Quoting Jetjack74 (Reply 2):
Europeans going to and from Asia/Australasia don't want to stop in DXB, JED, or DOH in order to get to SYD or LHR when the get there n/s.

Do you realize you are generalizing? You make it sound like most if not all Europeans do not care for the costs of a ticket if they can get somewhere non stop. I guess I believe in something different, that most people are cost conscientious and will go for the cheapest ticket above all. What percentage do these "Europeans going to and from Asia/Australasia" who will fly nonstop make against the whole? Do you consider yourself as part of this fraction? Is it possible you are making judgements as if everyone has had your experiences?
The meaning of life is curiosity; we were put on this planet to explore opportunities.
 
MaverickM11
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RE: Analysts Warn Middle East Will Face Overcapacity

Fri Sep 15, 2006 7:29 am

Quoting Gr8Circle (Reply 22):
....if a collapse of even a small magnitude does occur down the line, that could mean huge cancellations of orders

Bye bye A380! Silly

I don't think a collapse in the Middle East would necessarily be terrible for Boeing or Airbus. They could probably easily place the airframes with other airlines. EK/EY/QR are flying precious few people actually to/from the Middleast. All these EK clones are after the connecting market first and foremost since the local market is miniscule. There *is* a market between, say, Birmingham and Mumbai--if some crisis dampens demand for Middle Eastern travel, that means 30% of EK/EY/QR's passenger base is wiped out at most. Moreover, AI and BA, for example, can still fly that passenger if EY/EY/QR cannot; they will still need the aircraft capacity to do so as well.
E pur si muove -Galileo
 
jaysit
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RE: Analysts Warn Middle East Will Face Overcapacity

Fri Sep 15, 2006 8:20 am

Quoting Lehpron (Reply 25):
What percentage do these "Europeans going to and from Asia/Australasia" who will fly nonstop make against the whole?

Well, nonstop flights are not more expensive than connecting flights. Right now (and for the next 5-10 years at least) is how do they get from Europe to Australia non-stop? On the Space Shuttle? A private A345? And how exactly do you make a 24 hour non-stop in a seat with 31" pitch tolerable? No amount of computer games and movies can stop the average sod from going nuts.

Quoting MaverickM11 (Reply 26):
EK/EY/QR are flying precious few people actually to/from the Middleast.

True. But Dubai has all these ghastly bling bling amusement parks and beaches and hotels and artificial islands and lagoons and race tracks and golf courses and who know's what else sprouting up. Its also become the financial center of the Middle East (although Abu Dhabi actually has more moolah). Given that Dubai handles 22 million passengers today, of which about half are Dubai bound, these numbers will only increase.
Atheism is Myth Understood.
 
khobar
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RE: Analysts Warn Middle East Will Face Overcapacity

Fri Sep 15, 2006 9:11 am

Quoting Jacobin777 (Reply 15):
Is that why UA has decided to start IAD-KWI? When was the last time there was a "security and terror risk" in a Middle East country? Last I heard, it was all happening in European countries/United States...

Attacks in the US happened in 2001.

Since 2001, attacks have happened or were foiled in the following countries:
Israel
Singapore
Pakistan
Tunisia
Russia
India
Yemen
Indonesia
Philippines
Kenya
Iraq
Columbia
Saudi Arabia
Morocco
Gaza
Turkey
Spain
Egypt
Lebanon
Qatar
Myanmar
Afghanistan
Iran
United Kingdom
Bangladesh
Jordan
Canada
Sri Lanka
Germany
Moldova

Early 2006, Saudi security forces thwarted attempted suicide attacks on Abqaiq, so 2006 would be the answer to your question.

Quoting LTBEWR (Reply 19):
I agree that a number of the Persian Gulf states are socially reasonable, unlike Iran or Saudi Arabia. Still many have very dumb and prejudical stereotypes of the region, especially Americans, and see it as all a big, anti-Israeli place.

From: http://www.jpost.com/servlet/Satelli...ticle%2FShowFull&cid=1139395502196

'The parent company of a Dubai-based firm at the center of a political storm in the US over the purchase of American ports participates in the Arab boycott against Israel, The Jerusalem Post has learned.

The firm, Dubai Ports World, is seeking control over six major US ports, including those in New York, Miami, Philadelphia and Baltimore. It is entirely owned by the Government of Dubai via a holding company called the Ports, Customs and Free Zone Corporation (PCZC), which consists of the Dubai Port Authority, the Dubai Customs Department and the Jebel Ali Free Zone Area.

"Yes, of course the boycott is still in place and is still enforced," Muhammad Rashid a-Din, a staff member of the Dubai Customs Department's Office for the Boycott of Israel, told the Post in a telephone interview.

"If a product contained even some components that were made in Israel, and you wanted to import it to Dubai, it would be a problem," he said.

No, they're not anti-Israeli at all. That's a very dumb and prejudical stereotype of the region some people have, especially Americans.

LOL.


Quoting Tangowhisky (Reply 23):
If it is the economy you are referring to, when was the last time you heard of an economic recession in Saudi Arabia or UAE?

Unemployment rates in Saudi Arabia and UAE are disproportionate to their "apparent" economies. If things are booming so much, why aren't there jobs?
 
andessmf
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RE: Analysts Warn Middle East Will Face Overcapacity

Fri Sep 15, 2006 10:06 am

Most airlines have a nice history of ordering too many airplanes when times are good. Happened in the US several times in the last several decades. There is also a history of extremes in newly developing economic areas, where the success of one company brings imitators. Slowly, the excess companies whittle away till a balanced system remains.

My point: I have no doubt EK is a well run company that can survive and profit, by itself. Once you start adding other competitors to the mix, the word 'overcapacity' starts making sense.
 
jacobin777
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RE: Analysts Warn Middle East Will Face Overcapaci

Fri Sep 15, 2006 10:17 am

Quoting Khobar (Reply 28):

Since 2001, attacks have happened or were foiled in the following countries:

........and what does that have to do with Airport security and CivilAv? Care to explain?

..and you certainly weren't able to contest my comment about attacks on civilav. in the United Kingdom and USofA....

...and when was the last time a terrorist attack on a Middle East Airport?

Quoting Khobar (Reply 28):

"Yes, of course the boycott is still in place and is still enforced," Muhammad Rashid a-Din, a staff member of the Dubai Customs Department's Office for the Boycott of Israel, told the Post in a telephone interview.

 rotfl ..good job in bringup up the Dubai Ports World fiasco...your comments show your lack of knowledge on the subject, not to mention the United States prejudices...

"In a letter to Sen. Hillary Clinton obtained exclusively by CNN, Israel's Zim Integrated Shipping Services ( Israel's largest shipping firm) CEO Idon Ofer called state-owned DP World a strong business partner, despite the United Arab Emirates' boycott of Israel."**

**-source:CNN.com
"Up the Irons!"
 
Tangowhisky
Topic Author
Posts: 666
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RE: Analysts Warn Middle East Will Face Overcapacity

Fri Sep 15, 2006 10:26 am

Quoting Khobar (Reply 28):
Quoting Tangowhisky (Reply 23):
If it is the economy you are referring to, when was the last time you heard of an economic recession in Saudi Arabia or UAE?

Unemployment rates in Saudi Arabia and UAE are disproportionate to their "apparent" economies. If things are booming so much, why aren't there jobs?

Excellent point. But I was referring to the technical term of an economic recession: 2 quarters of negative GDP growth. So to come back to the excellent point you have made, if there are so many disproportionate souls not working, or those working but ill able to afford a plane ticket, then pax flying on Emirates are not the organic massess of a true economy. China on the other hand is working towards a true economy and there is a much higher gain in employment and wages than the Middle East. Emirates reason to buy all those A380 is purely traffic diversion, snd disproportionate to the actual volume of business justifying 43 A380s.

Dubai is trying to mimic Singapore as a business hub. Singapore first built its economy as a low cost manufacturing centre in the region, and then built itself as a major trading center. The success of Singapore Airlines was partly attributed to that. But Singapore Airlines prospered like Cathay as a connecting hub when in the days only a 747-200 had the longest range. The B777 is changing all that, and has facillitated traffic to fragment. So what does Dubai do? Get as many seats as possible, offer cheap tickets, and build the world's largest indoor ski hill, so people have a reason to come.
Only the paranoid survive
 
kaitak744
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RE: Analysts Warn Middle East Will Face Overcapaci

Fri Sep 15, 2006 10:45 am

First, as many people here have said, the average educated person can tell the difference between Qatar & United Arab Emirates and the rest of the middle east. Unlike the other central Asian countries, Qatar and the U.A.E. are not entangled in age old political messes.

Second:
The future fleet of Qatar:
~20 A320s
~30 A350s.*
6 777-200LRs
14 777-300ERs
2 A380s.

* (The order said up to 60 A350s, which means it includes options. The likely firm order is 30.)

Now, for an airline of an economically growing country like Qatar, the fleet numbers above are not that high. Also, they have no real competition as Dubai and Abu Dhabi are not the same city as Doha. In addition, those 2 A380s will more likely be used for special charter operations and VIP situations.

-

The future fleet of Etihad:
~20 A330-200s.
4 A340-500s.
4 A340-600s.
5 777-300ERs.
4 A380s.

That too is not that big. It is actually a pretty good size for an airline of a city with such a population as Abu Dhabi.

-

The future fleet of Emirates:
~50 787/A350s
10 777-200LRs
54 777-300ERs.
45 A380s.

For a city like Dubai, everything in this picture looks normal except for those 45 A380s. However, as many have suggested, Emirates will likely lease some out and dedicate a few to charter operations for rich sheiks.



This is why I never trust "analysts". They never look at things deeply.
 
khobar
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RE: Analysts Warn Middle East Will Face Overcapaci

Fri Sep 15, 2006 2:08 pm

Quoting Jacobin777 (Reply 30):
........and what does that have to do with Airport security and CivilAv? Care to explain?

Nothing specifically. I was merely pointing out that terrorism is not restricted to any particular part of the world. However, I will point out that BA suspended all flights to Saudi Arabia in 2003 specifically because of the threat of terrorism in that country.

Quoting Jacobin777 (Reply 30):
..and you certainly weren't able to contest my comment about attacks on civilav. in the United Kingdom and USofA....

You were responding to the comment "They still face an issue that many do not want to stop in a 3d country, especially one that is in the Middle East due to security and terror risks." You are talking about attacks on airports, not attacks on civilav. in general. So, please list all the terrorist attacks on US and UK airports to support your claim.

Quoting Jacobin777 (Reply 30):
...and when was the last time a terrorist attack on a Middle East Airport?

Off hand, Tel Aviv, May, 2002. 15 dead plus the suicide bomber. You asked.

Quoting Jacobin777 (Reply 30):
..good job in bringup up the Dubai Ports World fiasco...your comments show your lack of knowledge on the subject, not to mention the United States prejudices...

"In a letter to Sen. Hillary Clinton obtained exclusively by CNN, Israel's Zim Integrated Shipping Services ( Israel's largest shipping firm) CEO Idon Ofer called state-owned DP World a strong business partner, despite the United Arab Emirates' boycott of Israel."**

The point wasn't about the DPW deal but rather the fact that a boycott exists, that DPW claims they will enforce it, and that there is an official government agency/department/office in Dubai specifically for that purpose, as detailed in the article. That DPW and Zim have a business relationship is irrelevant - anyone who's actually been to that part of the world would know that. As an example:

"Medical equipment manufactured in Israel worth over $50 million was returned recently by a Dubai hospital in the United Arab Emirates because it carried Made in Israel labels.

"The equipment included staff uniform, patient clothes, bed sheets, pillows and towels. A hospital source refusing to identify itself or the hospital, said the fact the equipment was made in Israel was discovered during routine equipment inspections by hospital staff. "They were stunned to see the Made in Israel labels," he said....

"We told out supplier we reject the transaction and are not obligated to go ahead with it if they will not tell us where it comes from. They know we will not take equipment that was made in Israel," said the source. "

Unfortunately I have a feeling you'll not understand the joke.
 
74472
Posts: 113
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RE: Analysts Warn Middle East Will Face Overcapacity

Fri Sep 15, 2006 4:43 pm

Quoting Jaysit (Reply 17):
And while I'd rather get to Singapore or Mumbai or Bangkok non-stop from London, a lot of travellers don't care about a transit stop as long as they save money. Throw in 600 movies on a kick-ass IFE system, and you get the masses numb to an extra few hours of travel time.

I agree. What about the people travelling in the premium cabins ? Who will they fly with ?
 
andessmf
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RE: Analysts Warn Middle East Will Face Overcapacity

Fri Sep 15, 2006 5:41 pm

Quoting Kaitak744 (Reply 32):
This is why I never trust "analysts". They never look at things deeply.

My understanding is that those three carriers mentioned are all attempting the same business plan in the same neck of the woods. Individually, each of those business plans looks good. Taken together, it looks like a case of overcapacity.
 
jaysit
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Joined: Thu Jun 01, 2000 11:50 pm

RE: Analysts Warn Middle East Will Face Overcapacity

Fri Sep 15, 2006 10:33 pm

Quoting 74472 (Reply 34):
I agree. What about the people travelling in the premium cabins ? Who will they fly with ?

Again, it all depends.

EK, QR and EY price their premium cabins substantially lower than the likes of BA and CX, not to mention UA and NW who have no business pricing their meager offerings as high as they do. Thus, if you're a business traveller who has to be in East Asia from major cities in Europe that have nonstop service to the Far East, you're better off with the Asian or Euro nonstops. If you're flying from Athens or Madrid or Nice or Birmingham to Singapore, Sydney or Bangkok, you lose precious little by taking the Gulf carriers. And if you're travelling on pleasure, want to avail of Business Class but don't fancy paying big bucks, the Gulf carriers once again come into play.
Atheism is Myth Understood.
 
Gr8Circle
Posts: 2387
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RE: Analysts Warn Middle East Will Face Overcapacity

Fri Sep 15, 2006 10:44 pm

Quoting Tangowhisky (Reply 23):
If it is the economy you are referring to, when was the last time you heard of an economic recession in Saudi Arabia or UAE?

Now that you ask, let me update you....people generally think of the GCC countries as having unlimited wealth, etc.....in the mid-90's, when the price of oil had dipped well below $20 per barrel, all Gulf states had prepared their annual budget keeping in mind a long term rate of almost $10 per barrel.....Saudi Arabia and a couple of other GCC countries, started thinking of imposing Personal Income Tax.....govt. handouts were sharply curtailed and spending reduced in all sectors of the economy....

It was just sheer luck for them that due to various international factors, the oil prices went the other way next year and they all ended up with huge surpluses...but for a couple of years, it was quite tight....

Truth of the matter is that all Gulf countries depend almost wholly on oil revenues....because oil has been ruling at high prices (in no small measure due to the fact that it is guided by the OPEC cartel), we see the lavish wealth in that part of the world.....but don't think it will last forever.....an economic recession can happen anytime in the future for them, only, it will take some time....
 
khobar
Posts: 1336
Joined: Fri Mar 17, 2006 4:12 am

RE: Analysts Warn Middle East Will Face Overcapaci

Sat Sep 16, 2006 12:30 am

Quoting Tangowhisky (Reply 31):
Dubai is trying to mimic Singapore as a business hub. Singapore first built its economy as a low cost manufacturing centre in the region, and then built itself as a major trading center. The success of Singapore Airlines was partly attributed to that. But Singapore Airlines prospered like Cathay as a connecting hub when in the days only a 747-200 had the longest range. The B777 is changing all that, and has facillitated traffic to fragment. So what does Dubai do? Get as many seats as possible, offer cheap tickets, and build the world's largest indoor ski hill, so people have a reason to come.

Nicely put. It's hard to imagine Dubai being a hot spot for tourism, but it is attracting quite an interesting number of characters. The question is whether the bubble will burst and, if so, when? What is the long-term attraction of Dubai over other places?
 
jacobin777
Posts: 12262
Joined: Sat Sep 11, 2004 6:29 pm

RE: Analysts Warn Middle East Will Face Overcapaci

Sat Sep 16, 2006 1:47 am

Quoting Khobar (Reply 33):

Unfortunately I have a feeling you'll not understand the joke.

guess not..i'm a bit ignorant.... confused  sarcastic 

Quoting Khobar (Reply 33):
Nothing specifically. I was merely pointing out that terrorism is not restricted to any particular part of the world. However, I will point out that BA suspended all flights to Saudi Arabia in 2003 specifically because of the threat of terrorism in that country.

BA ended its flights, yet BD commenced and it has been proven to be profitable for them....

Quoting Khobar (Reply 33):
You were responding to the comment "They still face an issue that many do not want to stop in a 3d country, especially one that is in the Middle East due to security and terror risks." You are talking about attacks on airports, not attacks on civilav. in general. So, please list all the terrorist attacks on US and UK airports to support your claim.

9/11, recent UK bombing threats...granted they were based off of planes, but all the airports associated with it weren't Middle East Airports...

Quoting Khobar (Reply 33):

Off hand, Tel Aviv, May, 2002. 15 dead plus the suicide bomber. You asked.

I'll give you that one..but that's obviously what the thread is about..I'm sure you can figure it out..

Quoting Khobar (Reply 33):
The point wasn't about the DPW deal but rather the fact that a boycott exists, that DPW claims they will enforce it, and that there is an official government agency/department/office in Dubai specifically for that purpose, as detailed in the article. That DPW and Zim have a business relationship is irrelevant - anyone who's actually been to that part of the world would know that. As an example:

and business is still done under the table..for the one $50 million dollar situation you point out, billions of dollars of transactions go through......

Quoting Khobar (Reply 38):

Nicely put. It's hard to imagine Dubai being a hot spot for tourism

 rotfl ...ever been? do you know the stats or do you just prefer to making up unsubstantiated comments..?

" Dubai hotels post 37 per cent revenue growth in 2004; host all-time record 5.4 million guests Hotel industry's revenues touch AED 6.2 billion "

http://www.arabwideweb.com/english/Tourism_News.asp?id=83
"Up the Irons!"
 
jaysit
Posts: 10186
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RE: Analysts Warn Middle East Will Face Overcapacity

Sat Sep 16, 2006 2:12 am

Quoting Tangowhisky (Reply 31):
The B777 is changing all that, and has facillitated traffic to fragment. So what does Dubai do? Get as many seats as possible, offer cheap tickets, and build the world's largest indoor ski hill, so people have a reason to come.

Huh?
And Emirates is one of the world's largest operators of 777s and A330s. What's your point? The 777 and A330 have allowed airlines outside the major existing hubs of 20 years ago to develop as hubs in their own right, which is just what Emirates has done.

Quoting Tangowhisky (Reply 31):
Dubai is trying to mimic Singapore as a business hub. Singapore first built its economy as a low cost manufacturing centre in the region, and then built itself as a major trading center.

But that isn't the only viable model for a city state. Besides, you may have just heard about Dubai. For those who live in Dubai's catchment area (India, Pakistan, the Middle East, SE Asia) and the UK, Dubai has been a major business and trading center for the past 30 years. As a city state in the Gulf whose oil reserves are expected to run out soon, it planned for the future and fast.
Atheism is Myth Understood.
 
74472
Posts: 113
Joined: Thu Jun 15, 2006 10:19 pm

RE: Analysts Warn Middle East Will Face Overcapacity

Sat Sep 16, 2006 3:14 am

Quoting Jacobin777 (Reply 39):
BA ended its flights, yet BD commenced and it has been proven to be profitable for them....

I think you missed the point there ! A big grim point !!
 
khobar
Posts: 1336
Joined: Fri Mar 17, 2006 4:12 am

RE: Analysts Warn Middle East Will Face Overcapaci

Sat Sep 16, 2006 3:22 am

Quoting Jacobin777 (Reply 39):

BA ended its flights, yet BD commenced and it has been proven to be profitable for them....

Again, irrelevant. The original comment was with regards to security and terrorist threats, real or imagined, at Middle East airports, and you asked for an example.

Quoting Jacobin777 (Reply 39):
9/11, recent UK bombing threats...granted they were based off of planes, but all the airports associated with it weren't Middle East Airports...

Nor was there any suggestion that they were. In reality there were no attacks on any US or UK airports which seems contrary to what you said. If you had stuck to Europe as a whole you'd have gotten Rome and Vienna in there, at least. Now that you are talking about attacks against civav in general, you can add Canada (Air India), Philippines (Davao), Japan (Sikh bomb), Greece (Athens airport bomb), Lebanon (Beirut base for terrorists), Germany (origin of PA103 bomb), South Korea (Kimpo bomb), Iraq (prewar - KAL 707 bombed en route from), DRC (Congo, UTA DC-10)), Algeria (AF8969), Spain (Tarragona Intl. Airport bomb), Nepal (IC-814 hijack). Some of the above have multiple instances, but it's unnecessary to list every event.

Quoting Jacobin777 (Reply 39):
I'll give you that one..but that's obviously what the thread is about..I'm sure you can figure it out..

Um, I think you left out the word "not" in the above. In any case, I was testing your sense of humour, and it appears you have one. Good.

Quoting Jacobin777 (Reply 39):
and business is still done under the table..for the one $50 million dollar situation you point out, billions of dollars of transactions go through......

Yes, and?

Quoting Jacobin777 (Reply 39):
rotfl ...ever been? do you know the stats or do you just prefer to making up unsubstantiated comments..?

" Dubai hotels post 37 per cent revenue growth in 2004; host all-time record 5.4 million guests Hotel industry's revenues touch AED 6.2 billion "

http://www.arabwideweb.com/english/T...id=83

Yes, I've been. Used to live in that region actually. Know a thing or two about how things are, or at least were.

I said it is hard to imagine Dubai being a hotspot for tourism because it IS hard to imagine Dubai being a hotspot for tourism. Providing facts and figures about how big tourism is in Dubai does not change how hard it is to imagine Dubai being a hotspot for tourism. Get it? Once the fad fades, what will Dubai do for "tourist" dollars?

Now, with regards to the facts and figures you've provided, how many of those "tourists" were millionaires taking advantage of Dubai's exclusivity and "special services", and how many of those "tourists" decided between Disney World and Dubai? For comparison, Dubai drew 5.4 million guests. Disney World Orlando alone draws more than 30 million tourists a year.

On a light note that I hope you appreciate, here's something I find disturbing. The opening of an IKEA store in Tempe, AZ, was expected to attract up to 50,000 tourists a year? Yikes...
 
Tangowhisky
Topic Author
Posts: 666
Joined: Thu Jun 29, 2006 2:26 am

RE: Analysts Warn Middle East Will Face Overcapacity

Sat Sep 16, 2006 3:34 am

Quoting Jaysit (Reply 40):
The 777 and A330 have allowed airlines outside the major existing hubs of 20 years ago to develop as hubs in their own right, which is just what Emirates has done.

Actually it is the other way around. Airlines that built their hubs over the last 20 years, built these with the DC-9s, 727s, feeding 747-100/200s not the 767s/777s as they came in later. Some examples CO, NW, UA, AC, Swissair, Sabena, KLM, Alitalia, Iberia had stromg hubs up to the late 80's but they all stopped ordering the 747s planes and most got rid of them. They are now after smaller (777, 340, 767, 330) intercontinental aircraft/markets sufficing the needs of evolving market trends: serving secondary cities such as Munich or PHI, alignment of patterms in traffic redistribution, along with market fragmentation. It is no different than Southwest paoching network carriers' hub traffic by bypassing - resulting in the end of the era of any future mega hubs in the US like DFW, ORD, etc. At the global scale the same applies. Emirate's plan is dated. It's 60's 70's stuff. Unless they are and will be the centre of the world for business, they can not justify 43 A380s. How many A380s are being planned for NYC market? The only way their plan will work is by subsidizing these flights to cover costs once the overcapacity reality ytakes its course.

As a consumer, I read many labels on products that are/were built in Hong Kong and Singapore. Never read a label on a TV set that said Made in Dubai. They are trying to buy an economy versus building one. I sincerely hope they make it. More economies, the better the world is off.

Quoting Jaysit (Reply 40):
For those who live in Dubai's catchment area (India, Pakistan, the Middle East, SE Asia) and the UK, Dubai has been a major business and trading center for the past 30 years.

Most of the catchment area you are referring to is not for a 550 seat aircraft designed for 8000 nm missions. I or the analysts are not saying that they don't need any A380s. But Emirates are buying 43 passenger version A380s to redeirect LH, BA, AF, VS, tarffic from and to SE-Asian and Pacific markets. And furthermore they will fight for similar traffic from Cathay and SQ. Today. most of these markets are perfectly reachable with current twin A&B long range planes from/to major European hubs. And yes, there are those that require over 400 seats purely on true O&D demand in that region. By opening the gates and flooding all these markets with these masses of seats, they are targeting these markets by means of traffic redirection - not true O&D demand. It has less to do with matching to the needs of "true" volume of business now or projected in Dubai. The A380 for Emirates is part of the greater master plan to quick start a true "oil-free" economy in Dubai by making people stop and take note. Hopefully it will work.
Only the paranoid survive
 
jaysit
Posts: 10186
Joined: Thu Jun 01, 2000 11:50 pm

RE: Analysts Warn Middle East Will Face Overcapacity

Sat Sep 16, 2006 3:35 am

Quoting Khobar (Reply 42):
Again, irrelevant. The original comment was with regards to security and terrorist threats, real or imagined, at Middle East airports, and you asked for an example.

But where in the Gulf has terrorism affected flight operations? Nowhere.

Quoting Khobar (Reply 42):
For comparison, Dubai drew 5.4 million guests. Disney World Orlando alone draws more than 30 million tourists a year.

That's an extreme comparison. If that comparison were the standard by which institutions plan ahead for tourism, then the whole world may as well give up. Its not that Dubai has 5.4 million tourists versus Disney's 30 million. It's how many tourists Dubai had last year, 5 years ago, or 10 years ago compared to what they have today. Now, I find the idea of a vacation in Dubai to be torture (but then I hate Vegas too) and the average American family is unlikely to choose Dubai over Disney, but there are many who find the allure of Dubai irresistible.
Atheism is Myth Understood.
 
MaverickM11
Posts: 15323
Joined: Thu Apr 06, 2000 1:59 pm

RE: Analysts Warn Middle East Will Face Overcapacity

Sat Sep 16, 2006 4:30 am

Quoting Jaysit (Reply 27):
Given that Dubai handles 22 million passengers today, of which about half are Dubai bound

I've seen only 35% of all Dubai passengers are actually Dubai bound, and I think that number is even lower for EK alone.
E pur si muove -Galileo
 
kiramakora
Posts: 472
Joined: Thu Aug 10, 2006 9:00 am

RE: Analysts Warn Middle East Will Face Overcapacity

Sat Sep 16, 2006 5:12 am

Quoting Jaysit (Reply 21):
Quoting Kiramakora (Reply 18):
I would not go on to state that UAE is a bastion of equality. Treatment of non-Gulf citizens, and expats from certain Western countries in particular jobs is very sad and dispecable.

You mean non-Western countries

Yes. I meant: "Treatment of non-Gulf citizens, and expats from any non-Western countries, is very sad and dispecable in most jobs."
 
khobar
Posts: 1336
Joined: Fri Mar 17, 2006 4:12 am

RE: Analysts Warn Middle East Will Face Overcapacity

Sat Sep 16, 2006 6:14 am

Quoting Jaysit (Reply 44):
But where in the Gulf has terrorism affected flight operations? Nowhere.

Saudi Arabia.

Quoting Jaysit (Reply 44):
That's an extreme comparison. If that comparison were the standard by which institutions plan ahead for tourism, then the whole world may as well give up. Its not that Dubai has 5.4 million tourists versus Disney's 30 million. It's how many tourists Dubai had last year, 5 years ago, or 10 years ago compared to what they have today. Now, I find the idea of a vacation in Dubai to be torture (but then I hate Vegas too) and the average American family is unlikely to choose Dubai over Disney, but there are many who find the allure of Dubai irresistible.

Disney attracted 1.2 British tourists last year. That's why I wasn't thinking about American's having to decide between Disney and Dubai. Attendance figures for the Magic Kingdom show an increase of 6.5% between 2004 and 2005 (Disneyland showed an increase of 8.5%, but that's in California).

BTW, Memphis attracted about 10M tourists.

I don't think I'd go so far as to say a vacation in Dubai would be torture, but it's not the sort of place one would immediately think of as a vacation destination unless one were wanting to take advantage of what Dubai specifically offers. Vegas, for example, offers gambling - something not widespread in the US, and Nevada (at least in parts) has legal prostituion - again something not found elsewhere in the US. That's bound to appeal to some.

Dubai has alcohol and a nightlife, among other things, and I have to wonder if that has anything to do with tourism there. In Bahrain, for instance, tourism saw major increases starting in 1986 when the causeway opened. Oddly enough Saudi Arabia is trying hard to sell itself as a tourist destination too (http://www.suntimes.com/output/news/cst-nws-saudi09.html). Lol.

To put things into better perspective, take a look at Figure 1:

http://www.dcci.gov.ae/content/Bulle...BDubai%20%2Btourism%20%2Bsource%22

Note that Five Star hotels account for the vast majority of hotel revenue, speaking volumes about the "tourists" going to Dubai. (Worthy to note is that the fastest growing revenue is that of the one star hotels @31%, so things are getting more interesting).
 
tayaramecanici
Posts: 241
Joined: Sat Sep 09, 2006 5:03 am

RE: Analysts Warn Middle East Will Face Overcapacity

Sat Sep 16, 2006 6:21 am

Quoting Tangowhisky (Reply 31):
But I was referring to the technical term of an economic recession: 2 quarters of negative GDP growth.

Firstly, salutations (hail TW) for your excellent contributions to this forum, honestly its a pleasure reading your quality analysis. Regards financial data can you please name a single gulf based institute that comes out with credible financial statistics. The reason i say this is during my visit to dubai in april, one of the raging topics there was inflation and in the abscence of credible institutions average joe blog was dumb found at the increases in price of everything and anything i.e. Rents, fuel, taxi-fare, grocery etc. Some of the figures quoted was as high as 40%.

Quoting Tangowhisky (Reply 31):
Dubai is trying to mimic Singapore as a business hub

And they are on record stating this, that they want to turn dubai into another singapore. If you track the business model of Dubai Inc ( as the rulers like to be known), every move does mimic Singapore. If you trace back the history Singapore and HongKong, they were greatly supported by the British Imperial services the remanants of the British Raj in creating a vibrant economy based on financial services and trading . Which, unfortunately in the case of Dubai doesn't exist. The entrepreneurial spirit of the Indian business community has been maintaining dubai's as a trading post, due to socialists policies of Indian govt in the past. The Indian communities contribution was appreciated by Sheikh Ahmed in his interview in the 'Airline Business' 04. However with Indian goverment getting more liberal the business folks have better oppurtunity at home i.e. Diamond and Gold trading Economics Zones being created in India. Presently trade in dubai is limited to the trouble spots of Africa, Iran and Afghanistan.With Disney and Universal setting up base in India don't be surprised to see a Maharajah version of the little mouse soon. And dubai as a foreign destination, is getting less attractive compared to the SE-Asian countries, to the first time international Indian yuppie traveller too.

Quoting Tangowhisky (Reply 43):
The A380 for Emirates is part of the greater master plan to quick start a true "oil-free" economy in Dubai by making people stop and take note. Hopefully it will work.

Has it ever occured to you Dubai Inc could be a RISK SHARING partner in the A380 programme and Airbus has got them onboard for exactly the same reasons you mention. I know this is highly speculative and my evidence is purely circumstantial. In 1998 when Forgeard was made the Chief of Airbus with the task of getting the A380 off the drawing board, USA was screaming about state funding by EU to Airbus and it flouted anti-competition laws. Airbus was struggling for funding as EU states feared a trade war, soon after his promotion Forgeard was in Dubai and as usual on the front pages but with the Ruler Sheikh Mohammed rather than the chief of EK. The subsequent week Airbus announced the launch of the A380. EK was the 1st customer, the customer to push orders beyond 50nos and then again beyond 100. I have personally challenged a few senior Airbus executives on this and their reply has been that it is normal to have risk sharing partners.
The paradigm shift in the Indian economy in the last 5yrs has been very rapid and massive to have made most business plans redundant based on India's growth for the last 15yrs. The EU airlines likely to deploy their A380 to India alongwith the KingFishers of India. The inability to attract Indian airline staff is just another example growh in India and how rapid is the brand erosion, EK still offers better wages compared to airlines in India.

Quoting Gr8Circle (Reply 37):
.Saudi Arabia and a couple of other GCC countries, started thinking of imposing Personal Income Tax.....govt. handouts were sharply curtailed and spending reduced in all sectors of the economy....

Dubai is planning to impose VAT in addition to the many covert fees. Saudi's rolled back their gas prices after a couple of increases, UAE has increased over 100% in a year. Except for AUH all the other emirates are experiencing shortages in Power and Water supply.

P.S. There was a news article on BBC teletext today about a case of slavery being filed against Sheikh Mohammed al-makhtoum and Hamdan in a U.S. Court.
''You are as good as your nearest competitor'' Bob Crandall.
 
jacobin777
Posts: 12262
Joined: Sat Sep 11, 2004 6:29 pm

RE: Analysts Warn Middle East Will Face Overcapacity

Sat Sep 16, 2006 6:22 am

Quoting Jaysit (Reply 44):
but there are many who find the allure of Dubai irresistible.

 checkmark ...try to get a flight from Europe-DXB even the middle of summer..planes are comletely full...aviation stats are proving that to be correct......

regardless if DXB is a tourist attraction or not.....one can can basically fly anywhere in the world with a stop at DXB...especially once EK gets its 777-200LR's....
"Up the Irons!"