Beaucaire
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LH Complaining About EK Threat..

Mon Nov 26, 2007 1:15 pm

Once again Mr. Mayrhuber ,head of Lufthansa,has complained about the threat coming from companies like Emirates,who have knowingly applied trafic-rights out of TXL and STR.
He anticipates more than 3 M passengers lost via the Dubai hub and seeks protection with the German minister for Transport,Tiefensee ( ..what a great ally to have ..),who is key to maintain the current status quo regarding EK's German business.
Coming from a company like LH-a true global player- this attitude is somewhat irritating,speciufically when EK helps to maintain thousands of jobs in Europe with Airbus through un unprecedented amount of orders.
Sure EK draws many clients via Dubai into the Gulf and Asia -but many of those clients never would have taken LH anyway,since lot's of that EK business is new bsiness.
LH does not fly to Australia-but could seek an arrangement with Qatar or Singapore-airlines by offering new internodal services from Germany to Australia or other places in Asia.Rather than complain-act !
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wingman
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 1:27 pm

You Europeans are about to go beserk singing the praises of Airbus sales to EK while you depair over the inevitable collapse of your cherished "national" carriers. Something's going to have to give here, you can't have EK flying 300 widebodies through Europe every day and not have this absolutely shatter the financials of airlines like AF, LH, BA etc. Those will be the only airlines left within 10 years in Europe and they will barely be afloat. They all make money hand over fist right now but EK has what, 60-70 widebodies through Europe today? They're about to have another 200-300 in 10 years. So go ahead and build your 389, hell, make a 380-12 seating 2000 people and have fun on you Dubai layover as you travel from Munich to Vienna. Are we giggling yet people?
 
AIR MALTA
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 1:35 pm



Quoting Wingman (Reply 1):
You Europeans are about to go beserk singing the praises of Airbus sales to EK while you depair over the inevitable collapse of your cherished "national" carriers.

To me this is an unfair competition and Europeans are gonna lose this battle. EK, QR or EY have lower fuel charges, a lesser cost base and do not pay their crews European salaries. On top of that there are no unions to protect their workforce. European will still be attracted by their attractive prices and better product. So I do not see any solution to this problem. For my recent trip to Kuwait I was given the choice between BA, QR or EK. I chose BA although it was not the cheapest. I chose BA cause the timings were better for me and also because I wanted to fly European. Many other colleagues would have chosen QR or EK.
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PanHAM
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 1:39 pm

It is not Mr. Mayrhubers business to consider the jobs guaranteed in Euroipe by the massive EK orders. He has to run LH and he is responsible to make jobs safe at Lufthansa and the various companies it controls and it is also hois responisbilty to give the shareholders some return on their investment.

He is doing a good job on that. Of course LH is a global player and of course LH takes a lot of 6th freedom traffic from other countries. They may find restrictions there as well and not every country allows unlimited frequencies. LH does not want EK in their backyard, which is perfectly Ok from their point of view.

It is the CEO's job to get that message across and since LCAG does not need the SHJ hub any longer, he can do it even more.

.
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varig md-11
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 1:41 pm



Quoting Wingman (Reply 1):
You Europeans are about to go beserk singing the praises of Airbus sales to EK while you depair over the inevitable collapse of your cherished "national" carriers. Something's going to have to give here, you can't have EK flying 300 widebodies through Europe every day and not have this absolutely shatter the financials of airlines like AF, LH, BA etc

I absolutely agree with you that EK is buying tons of 'buses for a purpose and Europeans should not want one thing and it's contrary...

on an another hand it's no use to put all the responsibility on 'you europeans' since the entire concept of "globalisation" and "no barrier to free trade" is pushed by 'you americans'.... what happened with general industry will happen to airline industry: the newest machines went to China which is now manufacturing everything, and the newest airplanes are going to the gulf which will crush our legacy carriers cornered between Easyjet and the likes on domestic + Emirates and the likes on middle/far east (not to mention the possible extension to the west with routes like DXB-HAM-JFK)
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par13del
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 1:58 pm

Well, if you build aircraft and sell them, the purchaser has to fly them somewhere, and since Europe and to some extent the Far East are EK's main stomping ground, those competitors who fly there will have just that, competition.
As for globalization, Europe seems to have done a much better job "protecting" themselves than the Americans, so I'm not sure it makes a difference whether the Americans "push" the issue, Europe has been saying for years that they march to the beat of their own drum, so any fall out from this cannot be laid at the American's feet if that is what is being implied.

In the aircraft business, one of Boeing's stated reason for so much outsourcing of the B787 was to be able to match prices Airbus now offers for its products. Airbus is now outsourcing the manufacture of a percentage of its A320 to China, not sure if the justification for that is to do a me too or to go one step further.

In any event, if EK and others do take up all their orders for wide body a/c in the next 10years, it will very interesting to spend a day at a European airport doing some spotting.
 
varig md-11
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 2:18 pm



Quoting Par13del (Reply 5):
so any fall out from this cannot be laid at the American's feet if that is what is being implied.

that is not what is implied
for American CEOs, banks, financial newspapers and Wall Street, globalisation is extraordinary and is THE thing...
any resistance to it and you're seen as outdated: now here we are, globalisation at full power is starting.
whether Europeans or Americans, everybody will see consequences on their doorsteps now

next step is AF BA and LH will have to hire FA in Mauritius, Ecuador or Cambodia to stay competitive, like in any other business nowadays.
likewise maintenance will be done by AF Vietnam or LH India etc etc
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PanHAM
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 2:24 pm



Quoting Varig md-11 (Reply 4):
I absolutely agree with you that EK is buying tons of 'buses for a purpose and Europeans should not want one thing and it's contrary...

Why should a DAX 30 listed company, whose shares are 100% privately owned, consider the well being a another listed company whose shares are -to a certaoin extend - owned by France and Germany resp. German states.?

The fact that EK and EY order a lot of planes from EADS should not automatically imply that LH must welcome any number of additonal EK services to and from Germany. If you look carefully at the interview, Mayrhuber demanded equal opportunities and that was not purely against EK and the Emirates but more against the conditons he has to deal with in Germany. IIRC correctly, he said that taxes do not exist in the UAE and that the words "Betriebsrat" (workers council) Mitbestimmung (worker participation) and Planfeststellungsverfahren (planning permission hearings) have not even been tranbslated into Arabic.

I am sure they never will be translated and the Arabic word for all three above is the translation of edict.

Mr.Mayrhuber is not responsible for EADS,. As a shareholder, I want him to look after the interestes of LH and nothing else. He is doing his job, as the EK amange,ment are doing their job.
.
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par13del
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 2:56 pm

Next step is not automatic as in outsourcing your country's industry to other countries. The US is by most definitions the most "capitalistic" country in the world, and business in the US rather than politics generally drives that country, politicians usually implement business philosohpy rather than social policy.
To that end, business wants to make money anyway they can, if cheap labour is available elsewhere, that is where they go, reality is that what is in the best interest for Wall Street is not always in the best interest of the voters, a balance has to be found. Teach your kids fiscal prudence in school, on Wall Street that gets your stock devalued.
Europe is more national in terms of its economy, the UK less so, finding the proper balance will be interesting to watch as there has to be something other than the "industralized" nations becoming "consumer" nations, consumers have to work to obtain the funds used to make them consumers, where are they supposed to work and what types of jobs are they supposed to work at?
 
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lightsaber
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 3:17 pm



Quoting Beaucaire (Thread starter):
Emirates,who have knowingly applied trafic-rights out of TXL and STR.

So the question is, will EK get any more slots in Germany? These are the two airports EK has been trying hard to get into...

I do understand LH wanting to keep the crown as the world's largest longhaul airline. 'All is air in love and war, etc.' But how much of this should be fought in the public? I was under the impression that EK wasn't going to get access to either TXL or STR. Has that changed? Were the ministers looking for political backing on their decision?

It sounds a little public, but it does seem like everyone is doing their job.

Lightsaber
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Someone83
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 3:19 pm

Mayrhuber is just doing his job, trying to protect LH and its shareholders. Can't see anything wrong with that.
 
Beaucaire
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 3:32 pm

Now should Lufthansa Technics close their Dubai office ,because it's in the devil's backyard ?
There is an open-sky policy in the UAE that would allow LH or any other European carrier to use DBX as hub and do 6th and 7th freedom flights. LH did that in the past out of Sharjah with Cargo-flights.
Best retaliation would be to offer more Long Haul out of those places that ask for EK flights.
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Danny
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 3:40 pm

Quoting Wingman (Reply 1):
You Europeans are about to go beserk singing the praises of Airbus sales to EK while you depair over the inevitable collapse of your cherished "national" carriers.

I suggest that you go and check financials of those like Lufthansa or Air France and compare to those like United and Delta.

[Edited 2007-11-26 07:53:49]
 
varig md-11
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 3:47 pm



Quoting Par13del (Reply 8):
reality is that what is in the best interest for Wall Street is not always in the best interest of the voters, a balance has to be found.

 checkmark 

Quoting Par13del (Reply 8):
Next step is not automatic as in outsourcing your country's industry to other countries.

it is for sure not automatic step, but as in other industries this might happen especially if legacy EU carriers have to fight tax free - low wage airlines

Quoting Par13del (Reply 8):
Europe is more national in terms of its economy, the UK less so, finding the proper balance will be interesting to watch as there has to be something other than the "industralized" nations becoming "consumer" nations, consumers have to work to obtain the funds used to make them consumers, where are they supposed to work and what types of jobs are they supposed to work at?

I can't agree more with you
my statement was in fact semi-ironic / semi-forecasting of what might happen

Quoting PanHAM (Reply 7):
The fact that EK and EY order a lot of planes from EADS should not automatically imply that LH must welcome any number of additonal EK services to and from Germany.

 checkmark 
that's right
I was reacting to somebody who said "you europeans", but your remark is absolutely founded
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jacobin777
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 4:02 pm



Quoting Danny (Reply 12):

Quite laughable comment. I suggest that you go and check financials of those like Lufthansa or Air France and compare to those like United and Delta.

...I don't want to turn this into a "us versus them/United States versus Europe" war, but one only has to take a look at AZ and OA to see how poorly run airlines in Europe..and one has to take a look at AA (which has never filed for bankruptcy) or WN here in the United States to see how to run an airline company.

My point is it works both ways. Both Europe and the United States have well run and poorly run airline companies.

Regarding Mayrhuber, I agree, he is looking out for the best interests of LH...he's doing his job as he should be doing.. thumbsup 
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JoeCanuck
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 4:12 pm

EK salary expenses are significantly lower per person than LH's. I am with whomever said that LH should hub out of DXB...and I suspect they, and a few others will do just that. Either there or in the area where they also get to take advantage of cheap fuel, taxes and labour.

Halliburton is moving their head office from Houston to Dubai for those very reasons. Airlines would be foolish not to do the same.
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pnwtraveler
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 4:34 pm

If anyone airline becomes too dominant on routes you are open to all sorts of potential problems. Suppose EK continues in its massive growth and expanding to all sorts of routes and starts to put other carriers in jeopardy. And some actually get swallowed or go under. There are a number of flag carriers who are in serious trouble already. What would be the downside?

1. Higher fares.
2. Being subject to any political instability from the region the carrier is based in.
3. Loss of local jobs and has been pointed out above and replacement by workers at lower wages and with less benefits.
4. Loss of local tax income and ancillary benefits.
5. The upset of the balance between aircraft purchased and the need in the marketplace. Imagine all of sudden a large number of widebodies being put on the marketplace as used aircraft.

While I believe in fair markets and less intervention, at some point it becomes necessary. LH better be blowing its whistle loud and clear now because soon it will be too late.
 
Danny
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 4:54 pm



Quoting Jacobin777 (Reply 14):
Both Europe and the United States have well run and poorly run airline companies.

Show me a US airline making over a billion in a quarter (like AF recently).

But my point was different: EK does no harm at present to major European carriers and it will stay like that for a couple of years. Should they pose a serious threat they will hear from eurocrat regulators.
 
PanHAM
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 6:00 pm

Unfortunately, that interview is available in German only. LH should put a translation on their website, as a matter of fact.

I have mentioned it already above, but I believe what Mayrhuber actually said between the lines is, that he would like to have the same conditions EK has. Forget about the fact the the owners of EK are also the owners of the country, the airport and the licensing board. Even forget about the lower cost of employment in Dubai (on an overall scale)

If LH and all other carriers in Germany could enjoy a fast and rapid improvement of the infrastructure, making it possible that airports grow with traffic, that would help business far more than the alledged protection.

If MUC could get the third runway when needed, STR the second and if FRA had # 4 for landings already since 2 years, when the airport maxed out and if DUS could use their 2 runways to capacity, without ridicoulous restrictions, and BBI build as fast as JXB, I could imagine that LH would not object 2 each additional frequencies by EK to TXL and STR.

That would be euqal opportunity and even than, EK would have much more than LH gets in return from the Emirates.
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lightsaber
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 9:33 pm



Quoting PanHAM (Reply 18):
If LH and all other carriers in Germany could enjoy a fast and rapid improvement of the infrastructure, making it possible that airports grow with traffic, that would help business far more than the alledged protection.

I wish. (There is a reason I'm pro-airport construction almost everywhere!). I'd love to see BBI built as a 3 runway airport (yea... no plans, but I see the land and future growth potential.) Frankfurt needs that additional runway yesterday (not as much as LHR... but it would help all of Germany's economy).

MUN could use the 3rd runway too... (I'm looking at it on Google earth now... nice layout!).

The best defense is a strong offense and in airlines, that's growth. Although if there is a way to grow STR... please let me know (it looks very land locked).

Lightsaber
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brissedk
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 9:44 pm



Quoting Danny (Reply 17):
Show me a US airline making over a billion in a quarter (like AF recently).

AF/KL has done well, as have some of their US counterparts. One thing doesn't necessarily exclude the other, thankfully.

Quoting PanHAM (Reply 18):
I believe what Mayrhuber actually said between the lines is, that he would like to have the same conditions EK has.

Don't really think that Mayrhuber wants the same conditions to apply in Germany as in Dubai. Don't think the German people would have it  Wink

Quoting PanHAM (Reply 18):
That would be equal opportunity and even than, EK would have much more than LH gets in return from the Emirates.

See, I always thought that politicians should make decisions based on the good of the country and its citizens in particular. But let's disregard that EK might actually stimulate traffic, generate jobs in Germany, boost turism and what have you.  nosy 

Look, it's a reality of life that global companies compete on different terms. A developed market like the German has rules, regulations, employee protection, benefits etc. in place, and nobody would want it differently. EK comes from a different part of the world. Not as developed, but growing (and learning) at an extreme pace. At some point they will feel the growing pain, and reality will kick in. I trust EK will adjust accordingly - and I believe that they will do it perfectly when the time comes. Mayrhuber should welcome all competition, as it gives him the possibility to show-off what a great company is made of.

Regards,
BJ
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beyauty
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 9:48 pm



Quoting AIR MALTA (Reply 2):
For my recent trip to Kuwait I was given the choice between BA, QR or EK. I chose BA although it was not the cheapest. I chose BA cause the timings were better for me and also because I wanted to fly European. Many other colleagues would have chosen QR or EK.

With all due respect, have you stopped to think about the millions earned in the past few decades by European national airlines like LH, AF, BA and KL by hauling Middle Eastern traffic from North America and Europe to the Middle East and back, and how much Middle Eastern carriers have lost as a result? I guess it's time that Middle Eastern carriers take a slice of the cake.

May the best airline win!
 
brissedk
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 9:50 pm



Quoting Lightsaber (Reply 19):
The best defense is a strong offense and in airlines, that's growth

You are spot-on mr. Lightsaber! Let the games continue Big grin

Regards,
BJ
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Qazar
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 10:16 pm



Quoting Jacobin777 (Reply 14):
...I don't want to turn this into a "us versus them/United States versus Europe" war, but one only has to take a look at AZ and OA to see how poorly run airlines in Europe..and one has to take a look at AA (which has never filed for bankruptcy) or WN here in the United States to see how to run an airline company.

Ehhhh!!! Europe has OA and AZ, the USA has UA, DL, US, NW, CO.... Am I forgeting anyone who hasn't gone in Chapter 11 protection and come out all nice and fresh? Can I also mention the likes of Pan Am and TWA - 2 of the airline industry history's largest legacy carriers that went belly up!

I don't really know if AA had ever gone into Chapter 11 or not, but I know that European Governments aren't allowed to intervene in airline financials or aid their national carriers, the way the USA can... And according to my limited knowledge, the Europeans don't have a lovely little miracle blue pill called Chapter 11 bankruptcy protection...

So please don't start comparing "poorly run European airlines" by limiting yourself to AZ and OA... You insult our intelligence!

... And in order to see "how to run an airline", AA can learn a thing or 2 from the likes of LH, SQ, EK, and others on the other side of the pond.

Cheers!
 
tonystan
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 10:18 pm

Well LH better get used to it as we are now living in a globalised world. All aviation markets should be open skies. However I sense similiar fears in the US if the likes of BA are successful in having Openskies made more balanced!
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Qazar
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 10:29 pm



Quoting PanHAM (Reply 18):
I have mentioned it already above, but I believe what Mayrhuber actually said between the lines is, that he would like to have the same conditions EK has. Forget about the fact the the owners of EK are also the owners of the country, the airport and the licensing board. Even forget about the lower cost of employment in Dubai (on an overall scale)

If LH and all other carriers in Germany could enjoy a fast and rapid improvement of the infrastructure, making it possible that airports grow with traffic, that would help business far more than the alledged protection.

I fully agree with you!!!!

Lufthansa has always been an airline who valued healthy competition and strived on it. They are an extremely well run airline, and were the first to push for eliminating European Government aid to national airlines - even at times when they themselves needed it.

It is not within LH culture to seek Government intervention in issues unless unfair competition was flagrant. They have always been a driving force for change and as they have been the locomotive behind a lot of improvement in the European airline industry, they will continue to pave the way in an attempt at reducing bureaucracy, red tape, and Government limitations.

Dubai needs a new terminal, and poof, it's built in a week. Munich needs a runway, and all the tree huggers start crying a river, then flying Easyjet because it's cheaper - you can't have your cake and eat it!

This interview clearly quotes LH boss saying that infrastructure has to be improved and leeway must be given to allow that to happen - nothing about keeping Emirates out! All about: "Allow us to compete equally".

Cheers!
 
StarGoldLHR
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 10:59 pm



Quoting Wingman (Reply 1):
Those will be the only airlines left within 10 years in Europe and they will barely be afloat. They all make money hand over fist right now but EK has what, 60-70 widebodies through Europe today? They're about to have another 200-300 in 10 years. So go ahead and build your 389, hell, make a 380-12 seating 2000 people and have fun on you Dubai layover as you travel from Munich to Vienna. Are we giggling yet people?

Everyones assuming EK is only going to fly to Europe yeah ?

Sorry guys.. there's a whole world out there... most of which has poor service...EK can fill an African whole quite well.

As I mentioned before.. Phillipino workers in Africa... Chinese in Africa, Africans in Asia.. they dont have to commute via London.
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glideslope
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 11:19 pm



Quoting Danny (Reply 17):
But my point was different: EK does no harm at present to major European carriers and it will stay like that for a couple of years. Should they pose a serious threat they will hear from eurocrat regulators.

Nice. Allow open competition until your product is surpassed. Then implement more protectionist policies.  hypnotized 
To know your Enemy, you must become your Enemy.” Sun Tzu
 
jacobin777
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 11:26 pm



Quoting Danny (Reply 17):
Show me a US airline making over a billion in a quarter (like AF recently).

While not as much as AF/KL, AA has done quite well itself in terms of revenues and earnings...

Quoting BrisseDK (Reply 20):
Quoting Danny (Reply 17):
Show me a US airline making over a billion in a quarter (like AF recently).

AF/KL has done well, as have some of their US counterparts. One thing doesn't necessarily exclude the other, thankfully.

 checkmark 

Quoting Qazar (Reply 23):

Ehhhh!!! Europe has OA and AZ, the USA has UA, DL, US, NW, CO.... Am I forgeting anyone who hasn't gone in Chapter 11 protection and come out all nice and fresh? Can I also mention the likes of Pan Am and TWA - 2 of the airline industry history's largest legacy carriers that went belly up!

...many have filed for bankruptcy but they have survived....AZ is basically on life support thanks to the Italian Govt., otherwise the way it is hemorrhaging money, it would have been a dissolved corporation a while ago. The old Swiss Air was basically done also.

Quoting Qazar (Reply 23):
I don't really know if AA had ever gone into Chapter 11 or not



Quoting Jacobin777 (Reply 14):
AA (which has never filed for bankruptcy)



Quoting Qazar (Reply 23):
And according to my limited knowledge, the Europeans don't have a lovely little miracle blue pill called Chapter 11 bankruptcy protection...

....I see you really know the bankruptcy laws of the United States...any problems, just file for bankruptcy..solves everyones problems.. sarcastic 
"Up the Irons!"
 
col
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 11:45 pm

EK has done well picking up traffic from the regions in Europe and feeding via their hub. They do it with a very good on board product, and good connections. LH said in a recent article that they have grown well out of MAN, doing the same as EK is trying to do. So what is the difference? My money is on that LH need time to improve their on board product, which is dire, to a level competitive to EK.

From UK they have stimulated a lot of traffic, as well as assisted people so that they don't have to use BA and that pits of a hub of theirs. So I say good luck to EK, and hopefully this will stimulate LH to finally bring their 744/343/346 on board offerings into the 21st century.
 
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RE: LH Complaining About EK Threat..

Mon Nov 26, 2007 11:56 pm

I don't understand why LH and other European airlines resist the concept of flying smaller aircraft from smaller cities non-stop to Asia and 1-stop to Australia. That is the answer to the EK threat. Afterall, how many times do you want to visit Dubai?
 
QFYMML
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RE: LH Complaining About EK Threat..

Tue Nov 27, 2007 12:36 am



Quoting Beaucaire (Thread starter):
LH does not fly to Australia-but could seek an arrangement with Qatar or Singapore-airlines by offering new internodal services from Germany to Australia or other places in Asia.Rather than complain-act !

Just a question - do you mean services to Australia out of STR or TXL, because LH already codeshares on SQ flights into most if not all of Australia's SQ served cities.
Perhaps this is only out of FRA or MUC though, as I don't believe there are any services from TXL or STR to SIN that don't involve a stop in FRA or MUC.

I'd love to see a one stop MEL-STR  Smile
Though I'd probably still choose SQ then EK, over LH-operated, at least for the time being.
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atmx2000
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Joined: Wed Oct 13, 2004 4:24 pm

RE: LH Complaining About EK Threat..

Tue Nov 27, 2007 12:56 am



Quoting Qazar (Reply 23):
I don't really know if AA had ever gone into Chapter 11 or not, but I know that European Governments aren't allowed to intervene in airline financials or aid their national carriers, the way the USA can... And according to my limited knowledge, the Europeans don't have a lovely little miracle blue pill called Chapter 11 bankruptcy protection...

Chapter 11 isn't government intervention but rather the company or its creditors using a legal mechanism overseen by courts to reorganize. Chapter 11 goes forward over liquidation if it can be shown that creditors benefit more from reorganization versus liquidation under chapter 7.

Quoting PVG (Reply 30):

I don't understand why LH and other European airlines resist the concept of flying smaller aircraft from smaller cities non-stop to Asia and 1-stop to Australia. That is the answer to the EK threat. Afterall, how many times do you want to visit Dubai?

Too inefficient to fly long haul routes from a relatively close airport. But may the big airlines will start hub operations in some of those cities.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
FreequentFlier
Posts: 583
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RE: LH Complaining About EK Threat..

Tue Nov 27, 2007 1:01 am



Quoting Qazar (Reply 23):

Ehhhh!!! Europe has OA and AZ, the USA has UA, DL, US, NW, CO.... Am I forgeting anyone who hasn't gone in Chapter 11 protection and come out all nice and fresh? Can I also mention the likes of Pan Am and TWA - 2 of the airline industry history's largest legacy carriers that went belly up!

The reason EU carriers tend to be more profitable than US carriers is that US aviation is absolutely cut throat. The EU tends to be more dominated by national "flag carriers", with each EU nation generally having their own (although this may be about to end with the buyout of Swiss and now the potential buyouts of Iberia and Alitalia). Since the US doesn't have an obvious flag carrier, the government generally has no interest in trying to help any of them out at any time.

As others have pointed out, to say that EU or US carriers are better run is somewhat silly, as this tends to depend on what airline we are referencing. However, to those in the EU, the trips to bankruptcy court by the US carriers is not necessarily indicative of a poorly run airline. 9/11 had just occurred and the US aviation market is generally recognized as one of the most, if not the most competitive aviation market in the world.
 
chgoflyer
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RE: LH Complaining About EK Threat..

Tue Nov 27, 2007 3:21 am



Quoting Par13del (Reply 5):
Europe seems to have done a much better job "protecting" themselves than the Americans, so I'm not sure it makes a difference whether the Americans "push" the issue, Europe has been saying for years that they march to the beat of their own drum, so any fall out from this cannot be laid at the American's feet if that is what is being implied.

The trade policies of Europe and The U.S. are fundmentally different. The U.S. has a free market approach as long as the game is being played on a level playing field.
Will someone please wake me up in 4 years
 
manu
Posts: 265
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RE: LH Complaining About EK Threat..

Tue Nov 27, 2007 9:19 am

As soon as LH's economy class product is improved from the 80's/90's IFE, I will avoid them and fly other carriers. I am not European by residency and frequently must travel through Europe to get where I am going in Western Asia.
 
commavia
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RE: LH Complaining About EK Threat..

Tue Nov 27, 2007 9:58 am



Quoting FreequentFlier (Reply 33):
The reason EU carriers tend to be more profitable than US carriers is that US aviation is absolutely cut throat. The EU tends to be more dominated by national "flag carriers", with each EU nation generally having their own (although this may be about to end with the buyout of Swiss and now the potential buyouts of Iberia and Alitalia).

The other major difference is that for virtually every major legacy carrier in Europe - BA, AF, KL, LH, etc. - their international business makes up a substantial proportion (in most cases the majority) of their business. That is critical to any comparison. As others have said, the U.S. legacies face cutthroat competition across virtually 100% of their domestic networks, which in turn make up the majority of almost every major U.S. airline's business. In Europe, the national carriers don't face nearly as much low-cost competition on most of their network, as most of their network is to places that low-cost carriers have not (yet, at least) dared to tread: I'm talking the Middle East, Sub-Saharan Africa, India, etc.

In other words, it's a lot easier to make money when you are carting around 747 loads worth of high-paying customers to Bangalore where there is virtually no competition, as compared with hauling 737s to, say, Las Vegas, where loads are high but yields are virtually non-existent because of competition.
 
EI564
Posts: 193
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RE: LH Complaining About EK Threat..

Tue Nov 27, 2007 10:14 am



Quoting Chgoflyer (Reply 34):
The U.S. has a free market approach as long as the game is being played on a level playing field.

Level playing field means...all US airlines been controlled/owned by its citizens.  Smile
 
columba
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RE: LH Complaining About EK Threat..

Tue Nov 27, 2007 10:16 am



Quoting Commavia (Reply 36):
In other words, it's a lot easier to make money when you are carting around 747 loads worth of high-paying customers to Bangalore where there is virtually no competition, as compared with hauling 737s to, say, Las Vegas, where loads are high but yields are virtually non-existent because of competition.

This is also not true, look at two different examples Pan Am and TWA twere carting 747s around the world and are bankrupt while e.g. Jetblue and Southwest are making money flying people to Las Vegas and L.A.

Quoting Commavia (Reply 36):
In Europe, the national carriers don't face nearly as much low-cost competition on most of their network,

Easyjet, Ryanair, Air Berlin as well as high velocity trains are competing with AF, BA and LH on domestic and European routes.
It will forever be a McDonnell Douglas MD 80 , Boeing MD 80 sounds so wrong
 
commavia
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RE: LH Complaining About EK Threat..

Tue Nov 27, 2007 10:25 am



Quoting Columba (Reply 38):
This is also not true, look at two different examples Pan Am and TWA twere carting 747s around the world and are bankrupt while e.g. Jetblue and Southwest are making money flying people to Las Vegas and L.A.

And thus you just proved my point: TWA and Pan Am (two legacy carriers, one of which had a major domestic network and one of which had a domestic network after deregulation) are both gone, while two low-cost domestic carriers (Southwest and JetBlue) survive. So, once again, I repeat: the U.S. legacies have it very hard because of the competition from low-cost carriers competing on a substantial portion of their networks.

Quoting Columba (Reply 38):
Easyjet, Ryanair, Air Berlin as well as high velocity trains are competing with AF, BA and LH on domestic and European routes.

And, once again, as I said, the shorthaul domestic and European networks make up a far smaller portion of their network than, say, the shorthaul domestic networks of U.S. domestic carriers. Thanks again for proving my point.
 
PanHAM
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RE: LH Complaining About EK Threat..

Tue Nov 27, 2007 10:26 am



Quoting Chgoflyer (Reply 34):
The trade policies of Europe and The U.S. are fundmentally different. The U.S. has a free market approach as long as the game is being played on a level playing field.

eehhh- have you heard how difficult it was for DHL to enter the US market? Contrary to the market entry of UPS and FX in Europe?

The US is far from beeing a "free" market. The EU single market is far mor liberal. Look at Nafta, after years, Mexican truckers got at least some of the rstrictions lifted,just to mention one item. The open skies agreement still gives US carriers a better deal than European carriers, at least for some time.

Quoting Commavia (Reply 36):

In other words, it's a lot easier to make money when you are carting around 747 loads worth of high-paying customers to Bangalore where there is virtually no competition, as compared with hauling 737s to, say, Las Vegas, where loads are high but yields are virtually non-existent because of competitio

check the market reality-. Bangalore is exactly the market where airlines like LH and EK compete. Not exactly on equal terms BTW. LH and the other European legacies have plenty of low cost compettition in their home turg. Air Berlin is emerging as a viable competitor for LH.

US carriers enjoy the benefits of a high € with a $ cost base. I am not complaing, I just show some realities.
powered by Eierlikör
 
AIR MALTA
Posts: 1733
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RE: LH Complaining About EK Threat..

Tue Nov 27, 2007 10:45 am



Quoting BEYauty (Reply 21):
With all due respect, have you stopped to think about the millions earned in the past few decades by European national airlines like LH, AF, BA and KL by hauling Middle Eastern traffic from North America and Europe to the Middle East and back, and how much Middle Eastern carriers have lost as a result? I guess it's time that Middle Eastern carriers take a slice of the cake.

May the best airline win!

Nobody stopped those airlines from operation flights to North America at that time. I have nothing against Middle Eastern Airlines. I don't like the LCCs cause they don't have unions and they don't treat their employees very well. So i am trying to avoid them as well as those ME airlines and fly European airlines. I am an IT/Telecom guy and our company is closing sites in Europe and opening new ones in India and China. One day, my job could be transferred there cause it is cheaper and the guys there would be happy to have that job. The airlines industry is facing the same. So if I have the opportunity I will support my European airlines (or Tunisian) whenever it is possible.
Next flights : BRU-ZRH-CAI (LX)/ BRU-FCO-TLV (AZ)
 
UA772IAD
Posts: 1269
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RE: LH Complaining About EK Threat..

Tue Nov 27, 2007 10:47 am

Quoting Columba (Reply 38):

This is also not true, look at two different examples Pan Am and TWA twere carting 747s around the world and are bankrupt while e.g. Jetblue and Southwest are making money flying people to Las Vegas and L.A.

You cannot compare the two. At the time of death of Pan Am and TWA, both airlines were too large and faced too much competition from US and foreign carriers. They were horribly mis-managed and their products inferior. They both suffered disaster from which they could not recover (PA: Flight 103, and was the primary target of terrorist activities; TWA800, respectively).

For US domestic service, there is room for competition, we are a huge country (especially when compared to Europe). Airlines make money on certain domestic sectors for which they dominate, such as B6's NYC-FL. However, there is not ONE particular airline that dominates every single domestic route.

Quoting Columba (Reply 38):
Quoting Commavia (Reply 36):
In Europe, the national carriers don't face nearly as much low-cost competition on most of their network,

Easyjet, Ryanair, Air Berlin as well as high velocity trains are competing with AF, BA and LH on domestic and European routes.

You missed his point. He said that most of their network consists/relies on international traffic. Where,

Quoting Commavia (Reply 36):
most of their network is to places that low-cost carriers have not (yet, at least) dared to tread: I'm talking the Middle East, Sub-Saharan Africa, India, etc.

It is quite easy for an airline to make money when they route all passengers CDG/FRA/MUC/LHR - to the rest of the world. There is both O&D and heavy reliance from connections. Just look at the Port of Singapore, or even DXB as an example of this success.

Another important point, that has not been mentioned yet is that the European flag carriers have a historical advantage on their side. US carriers have only been flying international routes for about 20-25 years. And while colonies may be a thing of the past, the post-colonial world is still very much alive and important for European carriers. This is why AF/KL can dominate Africa-Paris, or BA London-India, where there are still economic and social (diaspora) interests in the colonies and capital cities of Europe.

[Edited 2007-11-27 02:50:54]
 
columba
Posts: 5045
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RE: LH Complaining About EK Threat..

Tue Nov 27, 2007 10:51 am



Quoting Commavia (Reply 39):
And, once again, as I said, the shorthaul domestic and European networks make up a far smaller portion of their network than, say, the shorthaul domestic networks of U.S. domestic carriers. Thanks again for proving my point.

Well the US domestic market is way bigger than the European domestic market so it is clear that you will find more competition but I don´t think that European airlines have it so much easier look at how many former European legacy carriers went bankrupt or nearly bankrupt over the last years KLM, Sabena, Swissair. Alitalia and Iberia will be bought soon. From all former European legacy carriers only AF, BA and LH are true global players.
On European and domestic routes nearly all people I know switched to Air Berlin, Ryanair and Easyjet on most of their flights or they take the TGV and ICE trains when possible which has cost LH a lot of customers. This is one of the reasons why they founded their low cost subsidiary "Germanwings".
In the US you have AA, DL, CO,UA, US and NW that compete against each other on international and domestic flights so I think it is inevitable that some of them will merge and that you will have only two or three different airlines that will offer international flights from a few hubs.
It will forever be a McDonnell Douglas MD 80 , Boeing MD 80 sounds so wrong
 
Lumberton
Posts: 4176
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RE: LH Complaining About EK Threat..

Tue Nov 27, 2007 11:01 am

As far as I'm concerned the only "surprise" is that Herr Mayrhuber is the first to verbalize what I suspect many airline CEOs see coming in the way of capacity dumping from EK. Not only Europe, but I suspect Australia / Qantas will feel it as well. I would expect to hear Air France and British Airways add their voice to his at some point. I would suspect that their initial target in Europe would be for the premium paying passenger, but from what I understand their coach product is pretty nice and well priced for the "value conscious" traveler.

This isn't the first time I said this, but it bears repeating: EK is in a position to D-E-M-A-N-D preferential treatment WRT routes, slots, a European hub (would help with that pilot recruitment problem) and perhaps cabotage given it's ownership of a significant chunk of Airbus' order book. (Only China comes close and they're getting a factory!) Of course, many here will flame this comment, and granted I have zero proof of this--it's an opinion after all. Why wouldn't they leverage this? They also own a chunk of EADS, although at this point its an investment stake, but there was talk of a seat on the board a while back. I suspect that the sheik feels he's "earned the right" to demand serious reciprocity in the way of concessions from certain European governments.

This could eventually come down to a stark choice of several thousand jobs at Airbus or tens of thousands of jobs at LH, BA, AF, KLM, et al.

[Edited 2007-11-27 03:06:02]
"When all is said and done, more will be said than done".
 
Fly2CHC
Posts: 443
Joined: Wed Jun 15, 2005 10:35 pm

RE: LH Complaining About EK Threat..

Tue Nov 27, 2007 11:04 am

Can someone please tell me how EK taking away business from LH eastwards is any different from BA, AF, KL taking passengers from numerous German ports to all destinations on their netwrok? The only difference is that in the case of the latter, there is sufficient demand for Lufthansa to do exactly the same. If they do not think it is commercially justifiable to operate additional frequencies to or through DXB, that's their problem to solve.

Anyway, isn't it against EU legislation for governments to provide such protectionism to national companies?

Quoting AIR MALTA (Reply 2):
EK, QR or EY have lower fuel charges

Rubbish! Please do research first before making inaccurate comments.
 
columba
Posts: 5045
Joined: Fri Dec 10, 2004 10:12 pm

RE: LH Complaining About EK Threat..

Tue Nov 27, 2007 11:09 am



Quoting UA772IAD (Reply 42):
At the time of death of Pan Am and TWA, both airlines were too large and faced too much competition from US and foreign carriers. They were horribly mis-managed and their products inferior. T

I don´t can not tell that they were too large but I agree on mismanaged and inferior products.

Quoting UA772IAD (Reply 42):
And while colonies may be a thing of the past, the post-colonial world is still very much alive and important for European carriers.

True for AF, KL and BA not true for LH which still manages to be one of the most succesful international airlines.

Quoting UA772IAD (Reply 42):
You missed his point. He said that most of their network consists/relies on international traffic.

That is why I mentioned TWA and Pan Am most of their network consisted of international traffic but that did not help them. Sure the last coffin of these two airlines where the two accidents but they had financial difficulties before that.
The problem is not that US airlines have so many problems on the domestic market but that several airlines are fighting for the same market internationally and domestically.
It will forever be a McDonnell Douglas MD 80 , Boeing MD 80 sounds so wrong
 
SailorOrion
Posts: 1959
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RE: LH Complaining About EK Threat..

Tue Nov 27, 2007 11:09 am

One should not forget that EK currently has the right conduct as many flights as they wish into Germany plus they have 5th freedom rights. The only restriction they face is that they are (currently) limited to four airports to fly to.

SailorOrion
 
Beaucaire
Topic Author
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RE: LH Complaining About EK Threat..

Tue Nov 27, 2007 11:15 am

If I consider the passenger-flow from my previous home-airport NUE,a lot of the higher-yield customers do transit either on CDG(AF),AMS(KLM),ZUR (LX) or CPH (SK )...
LH have steadily decreased their offering out of smaller airports in Germany to maximise the slots in FRA and/or MUC for larger aircraft.Of course they do offer conecting flights but literally no major direct international flights.
Their crown-jewel in Italy for instance is Air Dolomit,which allows them to pull out Italian clients into their MUC hub.
So they do basically the same on a smaller scale than what they accuse EK to do in Germany.
Please respect animals - don't eat them...
 
commavia
Posts: 9780
Joined: Mon Apr 25, 2005 2:30 am

RE: LH Complaining About EK Threat..

Tue Nov 27, 2007 11:25 am



Quoting PanHAM (Reply 40):
check the market reality-. Bangalore is exactly the market where airlines like LH and EK compete.

Uh, I've got the "market reality" just fine. I was talking about competition from low-cost competitors, of which EK is certainly not one. Sure, LH, for example, faces competition to BLR from EK, but that doesn't erode their yields that much compared with the low-cost carriers that operate on shorter routes. Given the choice, I'm sure LH would much rather be "competing" with EK than Ryanair.

Quoting Columba (Reply 43):
Well the US domestic market is way bigger than the European domestic market so it is clear that you will find more competition

Exactly my point, thank you.

Quoting Columba (Reply 43):
look at how many former European legacy carriers went bankrupt or nearly bankrupt over the last years KLM, Sabena, Swissair. Alitalia and Iberia will be bought soon.

KLM wasn't, to my knowledge, bankrupt nor nearly bankrupt. Sabena and Swissair are gone because of stupidity and mismanagement, pure and simple. In fact, both of their home markets are probably still two of the least competitive (relatively speaking) in all of Europe, at least when compared with the hyper-competitive U.K. market and the less-so but still highly competitive markets in France and Germany, and to a lesser extent Italy, Norway and The Netherlands.