EK156
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EK Wants More Flights To Germany, Govt Fear For LH

Mon Jul 30, 2007 7:18 am

Seems that EK wants to start Stuttgart and Berlin but the German Government are afraid for Lufthansa!

http://www.gulfnews.com/business/Aviation/10142857.html

Emirates seems to have struck another nerve with Lufthansa... let's see what the negotiations lead to

But I don't think EK will be willing to drop a daily in order to start a new destination in Germany... would they?
 
ikramerica
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Mon Jul 30, 2007 7:55 am

Emirates is trying to take over Europe and Australian markets, and after a while, I can see the EU governments balking. The EU has privatized all their carriers, but the middle east has pseudo state airlines with unlimited funds creating a destructive environment. It's not the free market at work here...
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HUYfan
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Mon Jul 30, 2007 7:59 am

What a load of rubbish, the story is the same all over Europe, national carriers largely ignore regional long-haul markets, Emirates is daring and succeeding where these incumbents are not interested. The likes of Emirates, Etihad and Qatar should be praised for making travel from the European regions much easier!

Regards

Mike
 
Kevin777
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Mon Jul 30, 2007 8:00 am

Interesting.. didn't know EK was already at 49 weekly to Germany, amazing..!

This is just competition coming in, and in a normal matter I'd say let the market decide themselves, and if LH are good enough then consumer's will still buy LH and they'll survive - but no reason pretending it's a level playing field, so I understand the German Government's hesitation to give additional rights.

Would EK give up frequencies for more on the route map? Well, I'd sort-of say they would, at least for either Stuttgart or Berlin - however, politically, I don't think so - doing so would just be accepting the current rights, and the German Government would win. By not doing so, keeping the higher frequencies and not starting another city, the German Government still wouldn't have won - and EK might even apply pressure from "within" by doing so; what city wouldn't want another carrier at their airport (look at how Berlin Airportsa are advertising in airline magazines). "Big old West-German Lufthansa from FRA is keeping the people of Berlin away from low air fares".. I can see the newspaper headlines...

Let's see..

Kevin777  Smile
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Kevin777
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Mon Jul 30, 2007 8:02 am

Quoting Ikramerica (Reply 1):
Emirates is trying to take over Europe and Australian markets, and after a while, I can see the EU governments balking. The EU has privatized all their carriers, but the middle east has pseudo state airlines with unlimited funds creating a destructive environment. It's not the free market at work here...

Spot-on - I'm indeed pro-competition in a free market-level playing field, but this is anything but..

Kevin777
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atmx2000
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Mon Jul 30, 2007 8:07 am

I suspect this will some how get tied into the politics of ordering planes from Airbus.

Anyway the expansion of the ME airlines should threaten European carriers particularly on routes from large cities that aren't major hubs and don't have many long haul international connections. The European carriers should be able to defend themselves on O&D routes from their hubs.
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ikramerica
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Mon Jul 30, 2007 8:18 am

Quoting Kevin777 (Reply 4):
Spot-on - I'm indeed pro-competition in a free market-level playing field, but this is anything but..

Finally someone who sees what's really going on. There's even more to it, to do with geopolitics and the rise of the "market face" of Islam, but that's for another thread.

Quoting Atmx2000 (Reply 5):
Anyway the expansion of the ME airlines should threaten European carriers particularly on routes from large cities that aren't major hubs and don't have many long haul international connections. The European carriers should be able to defend themselves on O&D routes from their hubs.

This is a failure of the EU airlines, no doubt. And I'd like to see some truly free market based airlines come in and show them a thing or two.

I think EU carriers could learn something from an Airline like AA, who has major hubs, but also connects important domestic cities directly with important international cities even if they aren't hubs. LH is starting to do this, but they need to do more of it.
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Kevin777
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Mon Jul 30, 2007 8:34 am

Quoting Atmx2000 (Reply 5):
Anyway the expansion of the ME airlines should threaten European carriers particularly on routes from large cities that aren't major hubs and don't have many long haul international connections. The European carriers should be able to defend themselves on O&D routes from their hubs.

You're absolutely right - this is a wake-up call for EU airlines. Also, EK is in a - very fair by the way - position to take good advantage of cities such as Berlin, Newcastle etc., with volume but hardly any intercon. Just like FI picks up niches like, say, MSP-CPH, that could never sustain nonstop, yet when you have to have a stopover, KEF is probably the best option. All fine and fair. Yet what I object to is, say, EK flying 8x daily from London to DXB, and what, 5 times or so daily to SYD/MEL - in that market, where p-t-p traffic indeed can sustain a service, you should have a level playing field between the players, not the case here.

Actually, I don't at all oppose EK flying TXL-DXB - that's indeed fair competition to LH; if you can't give it to the Berliners, EK will. But EK offering a tonne of capacity between, say, Frankfurt and Delhi, or Munich and Bangkok, no, that's not fair competition.

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patroni
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Mon Jul 30, 2007 8:38 am

Quoting Ikramerica (Reply 6):
I think EU carriers could learn something from an Airline like AA, who has major hubs, but also connects important domestic cities directly with important international cities even if they aren't hubs. LH is starting to do this, but they need to do more of it.

This might also have to do with the fact that the individual European countries are significantly smaller than the USA? Frankfurt and Stuttgart are for example only 70 minutes apart (high speed train), similar situation for Cologne and Frankfurt (50 minutes). I do however believe that we will see more decentralized services once more air service agreements are negotiated on EU-level.
 
behramjee
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Mon Jul 30, 2007 8:53 am

The German Govt may want to protect Lufthansa but it must realize the massive billions that EK has invested in Airbus aircraft of which the state of Germany holds a 20% stake in. On account of that, EK can play hard ball with the German Govt highlighting this issue and how much FDI they have brought into the German economy with their pax/cargo flights + creating jobs for Germans via investment in Airbus wide bodied aircraft etc etc.
 
atmx2000
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Mon Jul 30, 2007 9:09 am

Quoting Kevin777 (Reply 7):
Actually, I don't at all oppose EK flying TXL-DXB - that's indeed fair competition to LH; if you can't give it to the Berliners, EK will. But EK offering a tonne of capacity between, say, Frankfurt and Delhi, or Munich and Bangkok, no, that's not fair competition.

But the capacity isn't between Frankfurt and Delhi, it is between FRA and DXB and DXB and DEL. They are operating a hub system after all. Besides what right do they have to complain, when European carriers were benefiting from their geographical location between the US and Eastern Europe, the ME, and Asia. A large portion of the traffic these airlines carry from India, for example, is US or UK bound. Of course with the advent of correctly sized very long haul aircraft, they will eventually lose significant amount of this traffic as US and Indian carriers will be able to differentiate their routings with nonstop service and won't be at a disadvantage in picking up 5th freedom traffic in Europe.

Quoting Patroni (Reply 8):
This might also have to do with the fact that the individual European countries are significantly smaller than the USA? Frankfurt and Stuttgart are for example only 70 minutes apart (high speed train), similar situation for Cologne and Frankfurt (50 minutes). I do however believe that we will see more decentralized services once more air service agreements are negotiated on EU-level.

I think this has more to do with the fact that the state had the dominant role in the airline industry. A lot of focus was placed one or two large cities by one dominant state owned carrier, and governmental resources were invested to support those airlines. I would imagine the aviation industry and overall economy of European countries would look somewhat different without that centralization. Anyway the end result were large national airlines that had little competition even after privitization. And once these airlines became private they could comfortably consolidate operations further at their hub with little prospect of effective near term competition from airlines calling those smaller cities home.
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BoeingBoy
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Mon Jul 30, 2007 9:12 am

There are more than enough flights to Germany from the US. EK is barking up the wrong tree on this one.
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atmx2000
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Mon Jul 30, 2007 9:25 am

Quoting BoeingBoy (Reply 11):
There are more than enough flights to Germany from the US. EK is barking up the wrong tree on this one.

Who said anything about the US? EK wants to add additional Germany-DXB routings to increase passenger flow through their hub. That traffic would be Asia, Australia or maybe Africa bound.

[Edited 2007-07-30 02:43:21]
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sandrozrh
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RE: EK Wants More Flights To Germany, Govt Fear Fo

Mon Jul 30, 2007 9:29 am

Quoting HUYfan (Reply 2):
Emirates is daring and succeeding where these incumbents are not interested

They may be "daring", but the point is that they have the money to back it up in case they fail or to keep routes running even when they ain't doing well, yes you know what im talking about. Same reason why they can justify their overcapacity-strategy, but that's another story.
 
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Mon Jul 30, 2007 10:14 am

Quoting Atmx2000 (Reply 12):
Who said anything about the US? EK wants to add additional Germany-DXB routings to increase passenger flow through their hub.

Remember that EK is operating DXB-HAM-JFK with 5th Freedom Rights in and out of HAM, plus there was speculation about EK possibly starting up another US route out of DXB with a stop in Germany with 5th Freedom Rights. DUS was one of the possible locations mentioned for that stop.
 
behramjee
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Mon Jul 30, 2007 10:15 am

EK can do really well from TXL as there is a size able 6th freedom market segment to capture via DXB bound for the Far East, East/Southern Africa and Australia + high yielding diplomatic/political/embassy staff traffic as TXL is Germany's capital city  Wink

I have my doubts about Stuggart though!!!

An easy way out from this is to reduce DUS to daily instead of the current double daily and re-route that additional DXB-DUS daily flight to TXL instead.
 
EK156
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Mon Jul 30, 2007 3:25 pm

Alot of people said Australia will not grant extra rights to EK and they finally did.... Also there was speculation about Canada and it seems they are also eventually granting the right.... I think business is business for many of these airports and they really are more concerned about major carriers operating out of their terminals than protecting their local airlines. So eventually the German Govt will most probably give in and allow EK the extra rights.

Maybe not soon... but eventually they will cause Berlin would definitely want EK's business

Then again I might be wrong
 
PanHAM
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Mon Jul 30, 2007 3:45 pm

Lufthansa is a world airline and picks up a lot of 6th freedom traffic all over the world. Exactly what EK does. LH enjoys and still uses 5th freedom rights in the UAE, not for passengers but for freight. A bit less now than in the past, before they switched the Far East stop over to Astana. That agreement slapped back on them when EK started their 5th freedom HAM/JSK flight., Nobody thought about that, when the agreement was negoitiated with the UAE. Stuff happens

LH is sitting in thre glass house actually. I am not sure if they intervened or if our clueless Transport Minister acts on his own. Whatever, LH is a global contender and they should fight EK with a better product,not with over protection.

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Lumberton
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RE: EK Wants More Flights To Germany, Govt Fear Fo

Mon Jul 30, 2007 6:44 pm

Quoting Atmx2000 (Reply 5):
I suspect this will some how get tied into the politics of ordering planes from Airbus.

Indeed, I'm surprised that no one brought out the potential consequences sooner on this young thread. From Emirates' point of view, this likely smacks of protectionism and could rankle very much. After all, they are the single largest A380 customer and have taken an investment stake in EADS. IMO, the forthcoming deal for 100 or so twin aisles is Airbus' to lose, but this is a good start down that road.

I fully understand the reaction on the part of the European governments to protect their (national) carriers, but it shouldn't come as a surprise when one sells them 55 or so very large, capacious jets that they will see them in their back yard someday. Will it come down to making a choice between selling airplanes or thousands of jobs put at risk with the likes of LH, AF, IB, et al?
"When all is said and done, more will be said than done".
 
PanHAM
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RE: EK Wants More Flights To Germany, Govt Fear Fo

Mon Jul 30, 2007 7:13 pm

Quoting Lumberton (Reply 18):

Indeed, I'm surprised that no one brought out the potential consequences sooner on this young thread.

I am surprised this comes up at all. What does the order for planes have to do with the granting of traffic rights? I do not see the bargaining point. LH and AF are prvate companies. In state run France, M. Sarkozy may dictate the CEO of AF, in Germany, LH is a totallly privetaly owned company, the state has no saying whatsoever and the board of directors report to the supervisory board and both to the shareholders.

Although I believe in free market, I have a certain sympathy for market protection if one player takes unfair advantage. One could argue that the UAE, with only 2 viable destinations is probably asking too much since not only EK but also EY are enjoying traffic rights to and from Germany. With that, we have another 14 weekly frequencies plus freighters plus the EK 5th freedom route to JFK.

Applying your logic, I'd say - buy more Airbus, guys.

.

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Lumberton
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Mon Jul 30, 2007 7:16 pm

Quoting PanHAM (Reply 19):
I am surprised this comes up at all.

With all respect, I suggest that to maintain the two issues will remain distinct and "compartmentalized" is naive. What will the Airbus governments do if EK does link the two? After all, Dubai Inc owns a significant chunk of the A380 order book. If you were the Sheik and had spent loads of money ordering aircraft from Airbus, wouldn't you use every bargaining chip at your disposal? One can't blithely dismiss the possibility IMO.
"When all is said and done, more will be said than done".
 
PanHAM
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Mon Jul 30, 2007 7:59 pm

Quoting Lumberton (Reply 20):
ook. If you were the Sheik and had spent loads of money ordering aircraft from Airbus, wouldn't you use every bargaining chip at your disposal

what is your "bargaining chip"? There are signed and valid contracts to buy a number of A380. The 2 years delay has been compemnsated - see the various threads about this topic. What bargaining power has "The Sheikh" now? If he wants to breach a contract, the global law firms will come down like vultures on them. Their credit rating (yes, they need financing as well and some of the EK aircraft have been financed through funds in Germany for instance) would collapse. Besides, EK needs these planes for expansion, if not in Germany or France, in other areas they do not yet fly to. Look at the market for large airliners - where could they buy comparable aircraft with similar delivery slots? It's highly competetive, but still a sellers market.

Free market and competetion is fine but like everything in this world, it has to be reasonable. BTW - before EK starts complaining about Germany take a look at France. 2 daily flights to Paris and 3 x weekly to Nice, c'est tout. I guess, EK should start MRS, LYS and TLS first and double frequencies to the huge Parius market. They understand that kind of bargaining better in state run France anyway.





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texan
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Mon Jul 30, 2007 9:33 pm

Quoting SandroZRH (Reply 13):
They may be "daring", but the point is that they have the money to back it up in case they fail or to keep routes running even when they ain't doing well, yes you know what im talking about.

Although the airline itself has produced hefty profits year over year and, while it is possible for them to tap into state money if they need to, they have not needed to for a good number of years now. Additionally, their costs are absolutely rock bottom, making it possible for them to fly thinner routes at a profit. While I agree with you and the many others who do not like the idea of the company being quasi-state owned or able to receive state assistance, EK have done an excellent job managing costs and growing the company. I don't believe that, by itself, the possible specter of state assistance should be enough to deny EK the right to expand in certain countries.

Texan
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Lumberton
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Mon Jul 30, 2007 9:37 pm

Quoting PanHAM (Reply 21):
what is your "bargaining chip"?

WRT Emirates, one is not dealing with a mere "airline", but a state owned carrier. Sure Flannagan and Clark are the very public face of this carrier, but in the end it is the Sheik and his brother, AKA the al Maktoums, AKA the Government of Dubai, AKA Dubai Incorporated, that must be reckoned with here. Frankly, none of us know the terms of the A380 contracts, and whether they are "allowed" to cancel is a moot point. The fact remains that they can cancel, regardless of whether or not they lose the deposits, etc. It's not like Airbus is the only OEM, is it? How can the EU in good conscience be for open skies across the Atlantic and not support Open Skies for their industrial champion's premier customer? Like it or not, Dubai Incorporated has very serious leverage here.

It appears we disagree on the leverage available here. Let's see what develops. Cynical old guy that I am, I expect EK's Airbus orders to be very much a part of any negotiations for access to Germany, France, Spain, and the UK.

Quoting PanHAM (Reply 21):
BTW - before EK starts complaining about Germany take a look at France.

I have no doubt this will come up to in the discussion with Emirates and the countries involved!
"When all is said and done, more will be said than done".
 
PanHAM
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Mon Jul 30, 2007 10:00 pm

Quoting Lumberton (Reply 23):

WRT Emirates, one is not dealing with a mere "airline", but a state owned carrier

We all know that, but as I said before, they rely on financing as well. The Al Makhtoums also know very well that they are the absolute rulers only within their Sheikdom, outside they are normal businssmen and have to act as such. Contracts are binding and the other OEM woud think twice before committing to build 50 748is for a client that does not observe contracts.

Personally, I think that LH should compete with them and since they have a daily 747 with good load factors and not everyone likes to be squeezed into a 773 with another 400++people , a number LH does niot put into their 744s. LH has a good point in that competition.and they can also use Swiss with their lower cost base to compete.

. ,
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Lumberton
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Mon Jul 30, 2007 10:12 pm

Quoting PanHAM (Reply 24):
other OEM woud think twice before committing to build 50 748is for a client that does not observe contracts.

The "other OEM" might decide to ask for a 50% deposit, too!  

Seriously, before commenting that EK might, or might not, "observe a contract", one should know what that contract specifies; I suspect that none of us here know the specifics of the A380 order. They might have negotiated a cancellation clause on very, very favorable (whimsical?) terms, or they may not. The point I have been trying to make is that this very well could go "political" and result in some very unfavorable news for EADs if Dubai Incorporated does not get what it wants. They didn't order 55 A380s to be treated like a potted plant. . . .

The geopolitics of it all are fascinating!

[Edited 2007-07-30 15:15:15]
"When all is said and done, more will be said than done".
 
jacobin777
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Mon Jul 30, 2007 10:38 pm

Quoting Ikramerica (Reply 6):
There's even more to it, to do with geopolitics and the rise of the "market face" of Islam, but that's for another thread.

...care to share what you mean by that?

Quoting BoeingBoy (Reply 11):
There are more than enough flights to Germany from the US. EK is barking up the wrong tree on this one.

.....why is that?

Quoting Texan (Reply 22):
Although the airline itself has produced hefty profits year over year and, while it is possible for them to tap into state money if they need to, they have not needed to for a good number of years now. Additionally, their costs are absolutely rock bottom, making it possible for them to fly thinner routes at a profit. While I agree with you and the many others who do not like the idea of the company being quasi-state owned or able to receive state assistance, EK have done an excellent job managing costs and growing the company. I don't believe that, by itself, the possible specter of state assistance should be enough to deny EK the right to expand in certain countries.

..I find it funny so many people here are always harping so much against EK and the fact they are "quasi-state" owned, yada, yada, yada.....yet I don't read comments against the PR's, SA's, and other completely government-owned air carriers of the world...in fact, SQ is at minimum 55% held by the Singapore Government (SQ is 55% owned by Temasek Holdings, which is part of the Singapore Government)......

..to be honest, I see a bit of jealousy here....IMHO  twocents 
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PanHAM
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RE: EK Wants More Flights To Germany, Govt Fear Fo

Mon Jul 30, 2007 10:41 pm

Well, look at it that way, Dubai Incorporated wants to hit big and become independent from oil. That can be done only, if business from wealthy people all over the world is attracted and that can be done only if there is a certain amount of predictability. If they cancel such a contract just because EK does not get all the traffic rights they want, they might end up having nothing. Lsoing your credability is the worst of all losses. It's not only the airline with traffic rights and Aurbus or Boeing with planes they want to sell. The Al Makhtoums want to sell industrial and private property as well. Who is going to invest in a country that does not observe contracts and may confiscate your investment by decree?

Germany (and France) does not need the UAE, they need us as customers more than we do. LH would lose a daily flight, EK would lose much more than that. As said before, in all business dealings you have to be reasonable. Open skies does not necessarily mean that one participant can swampt the market at the expsense of another. .. .

I am sure they know that and will act accordingly.
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Lumberton
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Mon Jul 30, 2007 11:13 pm

Quoting PanHAM (Reply 27):
Open skies does not necessarily mean that one participant can swampt the market at the expsense of another. .. .

While I agree with you on one level, let's wait and see how "reasonable" the parties will be on this. If the German government takes a hard line and denies EK the additional access, then I don't think (and this is just a personal opinion) Dubai Inc. will back down. They didn't order all that metal just to get good publicity at airshows!

There could be another factor at work here as well. Remember the thread a while back about EK being short of pilots. Couldn't a possible solution to their rumored pilot woes be to establish another hub in Europe? I say this because much of the dissatisfaction I read--on PPRUNE-- from the perspective of the expat pilots at EK deals with quality of life issues in Dubai. I am not claiming that these reports are true or that I have any inside knowledge. I'm just playing "what if" here.

Ever since I joined a.net two years ago, we have had countless threads as to "what EK really wants". I think we are finally entering "end game" and they are starting to lay their cards on the table. The simply want to rule the world of commercial aviation and are buying the assets to make that happen! (flame suit on!)
"When all is said and done, more will be said than done".
 
OHLHD
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Mon Jul 30, 2007 11:20 pm

Quoting Lumberton (Reply 28):
The simply want to rule the world of commercial aviation and are buying the assets to make that happen! (flame suit on!)

What ever they want they won't achive it. Simple as that.  Smile Toooo many other airlines in this world.
 
Wsp
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RE: EK Wants More Flights To Germany, Govt Fear Fo

Mon Jul 30, 2007 11:27 pm

Quoting Lumberton (Reply 18):
Indeed, I'm surprised that no one brought out the potential consequences sooner on this young thread. From Emirates' point of view, this likely smacks of protectionism and could rankle very much. After all, they are the single largest A380 customer and have taken an investment stake in EADS. IMO, the forthcoming deal for 100 or so twin aisles is Airbus' to lose, but this is a good start down that road.

QR just celebrated the 10m-th passenger on the TXL-DOH route. Berlin would very much love to have EK do TXL-DXB to expand on that long-haul concept and they will lobby hard for that because it makes the city more competitive.

As much as you would love to see some kind of open confrontation, it is unlikely that this would happen. Dubai is planning for the long term, a political bloodbath to achieve some short term goals would be very different from how they operated in the past.
 
kl911
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Mon Jul 30, 2007 11:55 pm

Quoting EK156 (Thread starter):
Seems that EK wants to start Stuttgart and Berlin but the German Government are afraid for Lufthansa!

http://www.gulfnews.com/business/Aviation/10142857.html

Emirates seems to have struck another nerve with Lufthansa... let's see what the negotiations lead to

But I don't think EK will be willing to drop a daily in order to start a new destination in Germany... would they?

They should concentrate on AMS/BRU first in my opinion/wish . Can't stand it not having the option of selling EK from AMS/BRU to my clients. I've had the pleasure of flying them DUS-DXB and their product is something I haven't even experienced on Asian carriers. ( only flew CX and SQ) Absolutely perfect.

KL911
 
philzh
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Tue Jul 31, 2007 12:11 am

Quoting PanHAM (Reply 24):
they can also use Swiss with their lower cost base

That's the first time I ever heard that one!
Swiss and lower cost... interesting combination, to say the least.

EK seems to be going for a no-holds-barred expansion strategy and, luckily for them, have a low enough cost base, a (more than, IMHO) good-enough product, and all the capital and political backing they could ever need.
The Al-Maktoum's plan to develop Dubai into a touristical as well as financial centre of the 21st century is being pushed forward with little regard to any other concern... as a citizen of one of the extremely over-regulated European countries, one sometimes can only marvel at the sheer will manifested.
I doubt that LH, AF, QF or BA senior management feel much different in a way  Smile
 
dallasnewark
Posts: 391
Joined: Tue Nov 08, 2005 4:33 pm

RE: EK Wants More Flights To Germany, Govt Fear For LH

Tue Jul 31, 2007 12:14 am

Quoting Jacobin777 (Reply 26):
I don't read comments against the PR's, SA's, and other completely government-owned air carriers of the world...in fact, SQ is at minimum 55% held by the Singapore Government (SQ is 55% owned by Temasek Holdings, which is part of the Singapore Government)......

You missed his point entirely, it all depends on what kind of govt is behind the airline and what are it's intentions

UAE is doing great, the oil profits are overflowing, they have all the means and need to make EK look great in the eyes of the world.
If you take SA as example, the govt is not as interested in making their airline as successful as the UAE, and also their profits are nowhere near the profits of UAE gov.
B732/3/4/5/6/7/8/9, B742/4, B752/3,B762/3/4, B772/3, A306, A318/9/20/21, A332/3, A343/6, MD80/83/88, L1011, TU104/134, F
 
philzh
Posts: 111
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RE: EK Wants More Flights To Germany, Govt Fear Fo

Tue Jul 31, 2007 12:26 am

Quoting Dallasnewark (Reply 33):
UAE is doing great, the oil profits are overflowing

AFAIK, Dubai has not that much Oil profits.
Revenues from petroleum and natural gas contribute to less than 3% of Dubai's US$ 46 billion economy (2006).(Wikipedia)
In 2005, 94% of Dubai’s GDP came from non-oil sources, and this share is increasing, particularly in the real estate, banking and tourism sectors. (Economist).
 
dallasnewark
Posts: 391
Joined: Tue Nov 08, 2005 4:33 pm

RE: EK Wants More Flights To Germany, Govt Fear For LH

Tue Jul 31, 2007 12:32 am

Quoting Philzh (Reply 34):
In 2005, 94% of Dubai’s GDP came from non-oil sources, and this share is increasing, particularly in the real estate, banking and tourism sectors. (Economist).

If that's the case, that makes even more sense for UAE to market/promote/subsidize/support its state owned airline. I don't blame them, they want premium markets/premium passengers for EK, and having a helping hand of the financially successful govt doesn't hurt
B732/3/4/5/6/7/8/9, B742/4, B752/3,B762/3/4, B772/3, A306, A318/9/20/21, A332/3, A343/6, MD80/83/88, L1011, TU104/134, F
 
jacobin777
Posts: 12262
Joined: Sat Sep 11, 2004 6:29 pm

RE: EK Wants More Flights To Germany, Govt Fear For LH

Tue Jul 31, 2007 1:15 am

Quoting Dallasnewark (Reply 33):
You missed his point entirely, it all depends on what kind of govt is behind the airline and what are it's intentions

..I haven't missed the point..I was bringing up the concept that people here feel that EK has an advantage by virtue of being only semi-independent....yet no one here discusses the fact SQ is partially owned by the government also.....in other words...only semi-independent also..

Quoting Dallasnewark (Reply 33):

UAE is doing great, the oil profits are overflowing, they have all the means and need to make EK look great in the eyes of the world.

incorrect...

Quoting Philzh (Reply 34):

AFAIK, Dubai has not that much Oil profits.
Revenues from petroleum and natural gas contribute to less than 3% of Dubai's US$ 46 billion economy (2006).(Wikipedia)
In 2005, 94% of Dubai’s GDP came from non-oil sources, and this share is increasing, particularly in the real estate, banking and tourism sectors. (Economist).



Quoting Dallasnewark (Reply 33):
If you take SA as example, the govt is not as interested in making their airline as successful as the UAE

..that's not EK or the govt. of Dubai's problem....EK want to be one of the most successful carriers in the world and they are going about achieving it.....

Don't blame Clark who made all of the 'open skies' deals with the various countries back in the 1980's.....EK has been working on this for decades..

..not to mention, EK is just one part of the puzzle. Since Dubai has basically no oil/gas revenues (and what it does have will run out in about a decade or so), they need revenues/income from other sources....aviation, business (via. tax-free zones,etc), tourism, investments, etc is what Dubai is trying to achieve.....

Whether its a bubble, not sustainable, a dream, etc. is another debate....however at least they are daring to be different and not resting on their laurels...whether they succeed or not...well.lets see what happens....

EK as an airline has almost (if not already) achieved "critical mass"......
"Up the Irons!"
 
texan
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Tue Jul 31, 2007 1:44 am

Quoting Jacobin777 (Reply 26):
I find it funny so many people here are always harping so much against EK and the fact they are "quasi-state" owned, yada, yada, yada.....yet I don't read comments against the PR's, SA's, and other completely government-owned air carriers of the world

In this instance it is because I ended up reading and responding to this thread and I usually don't read or respond to threads about PR, SQ, etc because they don't interest me.

Quoting Jacobin777 (Reply 36):
I was bringing up the concept that people here feel that EK has an advantage by virtue of being only semi-independent....yet no one here discusses the fact SQ is partially owned by the government also.....in other words...only semi-independent also

Agreed but a bit outside the scope of this thread.

To attempt to get this thread back on track, if Germany, and the EU generally (not to mention the US but that is not what this thread is about), want to be seen as an open economy that truly encourages competition and market diversification, they should not have any real objections to the entrance of Emirates or any other airline into these markets. EK's entrance should provide better connection and trade opportunities to Asia, which benefits the local economies of the cities. Protectionism is a poor reason to hinder progress.

Texan
"I have always imagined that Paradise will be a kind of library."
 
jacobin777
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Tue Jul 31, 2007 2:46 am

Quoting Texan (Reply 37):
Quoting Jacobin777 (Reply 26):
I find it funny so many people here are always harping so much against EK and the fact they are "quasi-state" owned, yada, yada, yada.....yet I don't read comments against the PR's, SA's, and other completely government-owned air carriers of the world

In this instance it is because I ended up reading and responding to this thread and I usually don't read or respond to threads about PR, SQ, etc because they don't interest me.

....to ya.. thumbsup ...but I still stand by my comments... Smile
"Up the Irons!"
 
Drogba
Posts: 70
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RE: EK Wants More Flights To Germany, Govt Fear Fo

Tue Jul 31, 2007 7:12 am

Lufthansa is very careful at TXL. I live in Berlin and you can see it every day. Lufthansa CRJ no.1, no.2, from time to time a B737 or an A320. After the drop of the wall Lufthansa had the opportunity to settle down at TXL but they didn't. Air Berlin is today the biggest airline at the airport and LTU (daughter of AB) will start long-haul flights in November (BKK, MLB, PUJ, VRA).

Now Lufthansa is complaining about EK and I don't think it's fair. DL and CO are serving New York for about 3 years now I think and the load factor is about 70%. LH didn't risk something like that. TXL-DOH is successful, too (ok Qatar is using only an A300). A flight to TXL (or to other destinations) from EK shouldn't ruin LH, so I don't know why everybody is scared.
Next trips: TXL-VNO-FRA-ZRH-TXL, TXL-FRA-MAD-MUC-TXL , SXF-NAP-SXF, GWT-TXL
 
Kevin777
Posts: 951
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Wed Aug 01, 2007 5:38 am

Quoting Atmx2000 (Reply 10):
Quoting Kevin777 (Reply 7):
Actually, I don't at all oppose EK flying TXL-DXB - that's indeed fair competition to LH; if you can't give it to the Berliners, EK will. But EK offering a tonne of capacity between, say, Frankfurt and Delhi, or Munich and Bangkok, no, that's not fair competition.

But the capacity isn't between Frankfurt and Delhi, it is between FRA and DXB and DXB and DEL.

Well, I don't quite agree here... If EK is offering a tonne of capacity FRA-DXB and DXB-DEL, they are offering a tonne of capacity in the FRA-DEL market, no doubt about it IMO... If you're selling Whopper's, fries and coke seperately you are still offering "capacity" in the whopper meal market (wauw what a philosophical analogy on my part!!!  Wink ) ...

Quoting Atmx2000 (Reply 10):
Besides what right do they have to complain, when European carriers were benefiting from their geographical location between the US and Eastern Europe, the ME, and Asia.

Of course, EU carriers are doing the same thing, and I'm not against M.E. carriers coming in at all - however, if, say, LH totally flooded the market between the M.E. and the U.S. with capacity, backed by a governmental wish of making Germany a world hub or whatever, I wouldn't think that was fair either.

Quoting SandroZRH (Reply 13):
They may be "daring", but the point is that they have the money to back it up in case they fail or to keep routes running even when they ain't doing well, yes you know what im talking about. Same reason why they can justify their overcapacity-strategy, but that's another story.

Right..

Quoting EK156 (Reply 16):
So eventually the German Govt will most probably give in and allow EK the extra rights.

Think you're right on that one..

Quoting Lumberton (Reply 18):
Indeed, I'm surprised that no one brought out the potential consequences sooner on this young thread. From Emirates' point of view, this likely smacks of protectionism and could rankle very much. After all, they are the single largest A380 customer and have taken an investment stake in EADS. IMO, the forthcoming deal for 100 or so twin aisles is Airbus' to lose, but this is a good start down that road.

I fully understand the reaction on the part of the European governments to protect their (national) carriers, but it shouldn't come as a surprise when one sells them 55 or so very large, capacious jets that they will see them in their back yard someday. Will it come down to making a choice between selling airplanes or thousands of jobs put at risk with the likes of LH, AF, IB, et al?

Very good point - this is definitely a question of EU saying B when they've said A; if you sell them a couple of hundred planes you can't really complain that they're gonna use them, too..

Quoting Drogba (Reply 39):
Lufthansa is very careful at TXL. I live in Berlin and you can see it every day. Lufthansa CRJ no.1, no.2, from time to time a B737 or an A320. After the drop of the wall Lufthansa had the opportunity to settle down at TXL but they didn't. Air Berlin is today the biggest airline at the airport and LTU (daughter of AB) will start long-haul flights in November (BKK, MLB, PUJ, VRA).

Now Lufthansa is complaining about EK and I don't think it's fair. DL and CO are serving New York for about 3 years now I think and the load factor is about 70%. LH didn't risk something like that. TXL-DOH is successful, too (ok Qatar is using only an A300). A flight to TXL (or to other destinations) from EK shouldn't ruin LH, so I don't know why everybody is scared.

Again, I think BER would be an absolutely "fair" destination for EK, indeed giving LH some apparently badly needed competition in the German capital - but I also believe that the fair thing would be for EK to give up one of their other German flights for this.

Kevin777  Smile
"I was waiting for you at DFW, but you must have been in LUV" CPH-HAM-CPH CR9
 
Wsp
Posts: 356
Joined: Sun May 06, 2007 7:43 am

RE: EK Wants More Flights To Germany, Govt Fear Fo

Wed Aug 01, 2007 6:45 am

Quoting Kevin777 (Reply 40):
Of course, EU carriers are doing the same thing, and I'm not against M.E. carriers coming in at all - however, if, say, LH totally flooded the market between the M.E. and the U.S. with capacity, backed by a governmental wish of making Germany a world hub or whatever, I wouldn't think that was fair either.

Interesting hypothetical. Flooding the market would imply flying empty planes. Is EK doing that on a regular basis? (QR started TXL with an A319, thats not exactly "flooding the market" to me).

The hubs in FRA and MUC are (rightly so) high priorities for the German federal government and the local governments with billions of Euros of infrastructure investments. LH and other carriers move significant amounts of travelers from the US to Europe/M.E./Asia through their European hubs. The difference between DXB and FRA/MUC lies only in the hypocritical wording of the stakeholders not in the substance of their stated goals.

Quoting Kevin777 (Reply 40):
Right..

Yeah, didn't LH loose some lawsuits over price dumping when the first LCCs set up shop in Germany?

Quoting Kevin777 (Reply 40):
Very good point - this is definitely a question of EU saying B when they've said A; if you sell them a couple of hundred planes you can't really complain that they're gonna use them, too..

Aircraft are just a small rather insignificant bit of the trade between the EU and UAE. The UAE is mainly a big desert. Everything you see there (except for oil, natural gas, a few veggies and fish) was imported from somewhere else. Just because this forum is centered around aircraft (manufacturing) doesn't mean that the UAE government is fixated on that. How many 777 did they cancel after the Dubai Ports US debacle?

Quoting Kevin777 (Reply 40):
Again, I think BER would be an absolutely "fair" destination for EK, indeed giving LH some apparently badly needed competition in the German capital - but I also believe that the fair thing would be for EK to give up one of their other German flights for this.

Why should they give up anything? LH has dozens of competitors in Berlin that carry passengers to their hubs without any restrictions, why is a hub so different when it is not located in LHR/CDG/AMS/MXP etc. but in the M.E. instead?
 
PanHAM
Posts: 8530
Joined: Fri May 06, 2005 6:44 pm

RE: EK Wants More Flights To Germany, Govt Fear For LH

Wed Aug 01, 2007 2:53 pm

Quoting Drogba (Reply 39):

Now Lufthansa is complaining about EK and I don't think it's fair. DL and CO are serving New York for about 3 years now I think and the load factor is about 70%. LH didn't risk something like that. TXL-DOH is successful, too (ok Qatar is using only an A300). A flight to TXL (or to other destinations) from EK shouldn't ruin LH, so I don't know why everybody is scared

The market is not there in Berlin. LH had a flight TXL-IAD and they lost money. If the Senate wants LH tooperate a loss making route they have to pay for it. LH is not Government owned, they are a normal company havoing to make money.

DL and COs operations to TXL are both hub to spoke. For LH it would be spoke to spoke -in the best case spoke to alliance hub, cannot be done from a city where the traffic mix - full fare.,leisure and transit - does not exist. Neither CO nor DL would operate flights from noin hiub citiesto foreignd estinations,

The big competeive advantage Germany has over other countries - being polycentric - turns into a disadvantage for LH here . Thats the real issue.



.
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godbless
Posts: 2680
Joined: Tue Apr 04, 2000 5:26 am

RE: EK Wants More Flights To Germany, Govt Fear For LH

Wed Aug 01, 2007 3:11 pm

Quoting PanHAM (Reply 42):
For LH it would be spoke to spoke -in the best case spoke to alliance hub

That is exactly the reason why I ask myself why LH doesn't let UA/US serve more destinations in Germany. They could connect BER, DUS or STR without having to position aircraft away from FRA/MUC. With a revenue share everybody could be happy and LH could offer more direct flights from other airports.

Are they too greedy to share?

If EK would add STR and TXL they would offer 450 extra seats to Germany a day. Those passengers lost from current airlines leak down to a few for LH, a few for BA, AF, AZ,... So where is the problem for EK to adopt the idea of using a hub? I'm really in favor of LH but this protectionism really goes to far. Either they serve certain markets themselves or they accept the fact that others instead will...
 
SailorOrion
Posts: 1959
Joined: Tue Feb 06, 2001 5:56 pm

RE: EK Wants More Flights To Germany, Govt Fear For LH

Wed Aug 01, 2007 3:15 pm

Quoting Godbless (Reply 43):

That is exactly the reason why I ask myself why LH doesn't let UA/US serve more destinations in Germany.

Maybe because they do not want? UA did serve DUS a while ago, first ORD, then IAD, then they pulled the route because they _apparently_ couldn't make any money. Btw, LH doesn't care whether a route is done on LH or UA metal because all the routes are done on a "share the cost, share the profit" basis anyway.

US just doesn't seem to have the planes at hand...

SailorOrion
 
PanHAM
Posts: 8530
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RE: EK Wants More Flights To Germany, Govt Fear For LH

Wed Aug 01, 2007 4:28 pm

Quoting Godbless (Reply 43):

That is exactly the reason why I ask myself why LH doesn't let UA/US serve more destinations in Germany. They could connect BER, DUS or

May be these carriers route planners have come to the same conclusion as LH . that they cannot make money serving these destinations, or - they can make more m oney using the planes to serve other destinaitons.

Quoting Godbless (Reply 43):
in favor of LH but this protectionism really goes to far

I agree on that, but can you blame them? Mayrhuber mentioned that already in his speech at the AGM in Cologne last year. The point is, the UAE has only 2 viable destinations to serve for LH and here comes the UAE, serves already 4 in Germany and wants to grab anothetr 2-
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Wsp
Posts: 356
Joined: Sun May 06, 2007 7:43 am

RE: EK Wants More Flights To Germany, Govt Fear Fo

Thu Aug 02, 2007 5:47 am

Quoting PanHAM (Reply 45):
I agree on that, but can you blame them? Mayrhuber mentioned that already in his speech at the AGM in Cologne last year. The point is, the UAE has only 2 viable destinations to serve for LH and here comes the UAE, serves already 4 in Germany and wants to grab anothetr 2-

That point applies to any small state. Finland has only one viable destination but still Finnair feeds their hub from every major German airport.
 
sebring
Posts: 1319
Joined: Sat Jul 24, 2004 12:08 am

RE: EK Wants More Flights To Germany, Govt Fear For LH

Thu Aug 02, 2007 5:58 am

Quoting EK156 (Reply 16):
Also there was speculation about Canada and it seems they are also eventually granting the right....

Then again I might be wrong

The three frequencies to Toronto that EK is getting have been available to it for many years, only they kept demanding daily rights. In effect, EK has caved, not the Canadian government which always told the airline to fly the available frequencies before asking for more.
 
godbless
Posts: 2680
Joined: Tue Apr 04, 2000 5:26 am

RE: EK Wants More Flights To Germany, Govt Fear For LH

Thu Aug 02, 2007 2:50 pm

Quoting PanHAM (Reply 45):
I agree on that, but can you blame them?

Of course not. But the German Government shouldn't encourage this attitude.

Quoting PanHAM (Reply 45):
Mayrhuber mentioned that already in his speech at the AGM in Cologne last year. The point is, the UAE has only 2 viable destinations to serve for LH and here comes the UAE, serves already 4 in Germany and wants to grab another 2-

This is very childish. Is LH not happy about having a large home market that they can serve? Since the EU is one large market, maybe EK should only be allowed to serve one destination in all of europe.
DXB-STR would have the same impact on LH as would, let's say DXB-BRU, they loose a few passengers going via FRA. The main problem here is just that in the eyes of LH Germany just has FRA and MUC as airports, and they will do everything to not have to accept the fact that there are other german airports with potencial for int. routes (take a look at 20 years of STR-ATL on DL...).
 
PanHAM
Posts: 8530
Joined: Fri May 06, 2005 6:44 pm

RE: EK Wants More Flights To Germany, Govt Fear For LH

Thu Aug 02, 2007 3:01 pm

Quoting Wsp (Reply 46):
That point applies to any small state. Finland has only one viable destination but still Finnair feeds their hub from every major German air

Both Germany and Finland are members of a single market to which the UAE do not belong. The UAE and Germany have a very liberal agreement biut it is short of an open skies agreement.

Talking about restrictions. The UAE would like to have an open skies agreement with all of the world and they always claim that everyone could come to Dubai and open an airline (or any other business) and compete with EK. However, that is half the truth, you cannot do that without a local "sponsor". Here in Germany, you just need to risk your own money without having to have a mandatory non-working partner with his hands in the honey pot.

. . .
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