UAEflyer
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Emirates Profit Slumps 72%

Thu May 10, 2012 9:17 am

 
chiad
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RE: Emirates Profit Slumps 72%

Thu May 10, 2012 9:23 am

Quoting UAEflyer (Thread starter):
It seems that the oil price ate their profit

Though times. But EK's doing much better than most major airlines.
 
Pe@rson
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RE: Emirates Profit Slumps 72%

Thu May 10, 2012 9:59 am

A big drop, but a decent profit nonetheless.

Quoting Chiad (Reply 1):
But EK's doing much better than most major airlines.

Indeed.
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
 
ekgold
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RE: Emirates Profit Slumps 72%

Thu May 10, 2012 10:28 am

I guess it is just as well that they don't pay full price for their fuel as professed on this website by others... The result would have been diabolical otherwise   
 
raptor1090
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RE: Emirates Profit Slumps 72%

Thu May 10, 2012 10:35 am

 
afterburner
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RE: Emirates Profit Slumps 72%

Thu May 10, 2012 10:38 am

Hey, they still makes some profit, while lots of other airlines don't.
 
something
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RE: Emirates Profit Slumps 72%

Thu May 10, 2012 10:56 am

Quoting Chiad (Reply 1):
But EK's doing much better than most major airlines.

If ''most major airlines'' raised capital under the same low interest rates, if ''most major airlines'' didn't have to do regional/domestic flying and hub feeding, if ''most major airlines'' could hire and fire people willy-nilly, if ''most other major airlines'' were supported by the government behind them and weren't tied to regulations, they'd be profitable too.

Creating the EK brand was an impressive undertaking, because they're profitable (~ it works). If they weren't, EK could hardly be called an ''achievement''.
..sick of it. -K. Pilkington.
 
LAXtoATL
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RE: Emirates Profit Slumps 72%

Thu May 10, 2012 11:52 am

Quoting something (Reply 6):
If ''most major airlines'' raised capital under the same low interest rates, if ''most major airlines'' didn't have to do regional/domestic flying and hub feeding, if ''most major airlines'' could hire and fire people willy-nilly, if ''most other major airlines'' were supported by the government behind them and weren't tied to regulations, they'd be profitable too.

Curious do you even know what interest rates EK pays on their capital? What other international carriers are paying? I read an annual report a couple of years ago, and rates didn't seem all that unusual to me, if you aren't just running your mouth and actually have facts to back it his statement, please post the rates, I would love to see the difference.

While EK doesn't do any "domestic flying", they most certainly do regional flying. They do a lot of regional flying as a matter of fact. And to suggest they don't do hub feeding is just asinine! That is all they do, DXB is one of the largest airports in the world (pax traffic), not because Dubai is some sort of massive business center or tourist destination but because Emirates funnels almost all of its traffic through their DXB hub! I would bet their connecting traffic at their DXB hub is probably the largest percentage of any airline in the world, and certainly top 5.

Outside of N. America and Europe, most airlines (and companies in general) enjoy the ability to fire people "wily-nily" as you say. That is not unique to Emirates. But I don't see how this is relevant. I have heard no complaints about former Emirates employees who were unjustly fired. I also hear very few complaints from employees about the airline mistreating or under paying them. Which ironically is quite unique, since that is a common complaint from employees of "most major airlines".

Not sure what you mean by supported by government. "Most major airlines" are supported by the government behind them. And all major airlines follow regulations!!! In fact they all follow the same regulations, because everywhere they fly they must adhere to the local regulations in place!

Emirates might enjoy some benefits like low taxation (and they certainly arent the only ones - heck even in the US where we have high taxes, because of bankruptcy certain airlines were allowed to carry credits that allowed them to reduce or eliminate their tax bill for years to come), but they are profitable mainly because of their business model and how they execute it. There is no benefit that Emirates has that is not enjoyed by other airlines around the world, in other words there is nothing unique to Emirates. You show me their interest rate and I'll show you an airline with a cheaper rate, you show me their domestic/regional ops and I'll show you an airline doing less, you show me the support they get from government and I'll show you an airline with more government support. I think you get the point (at least I hope you do).
 
PanHAM
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RE: Emirates Profit Slumps 72%

Thu May 10, 2012 11:52 am

As something already said, put that in relation with the work conditions LH and AF/Kl have to live and deal with and the profit is not that bright at all. And, making that statement, I assume that they pay market prices for fuel.

But work conditons alone, the lack of taxation, social conributions (in Germany alone, the direct employers contribution to health, pension job less insurance amounts to more than 20% of the salary, the other 20 % paid by the workers have to be generated as well in the company. Low skilled labour is by far less expensive than in Europe and the conditions would be intolerable here.

.
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huaiwei
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RE: Emirates Profit Slumps 72%

Thu May 10, 2012 11:53 am

Quoting something (Reply 6):
If ''most major airlines'' raised capital under the same low interest rates, if ''most major airlines'' didn't have to do regional/domestic flying and hub feeding, if ''most major airlines'' could hire and fire people willy-nilly, if ''most other major airlines'' were supported by the government behind them and weren't tied to regulations, they'd be profitable too.

Last I checked, most of these airlines eventually go bust.

That EK went in the other direction in terms of profitability and growth says alot about the validity of your assumptions.

Meanwhile, SQ's profits also plunged 69% for the Jan-Mar 2012 period. It must be a truly pathetic airline to do this badly despite all the advantages!

[Edited 2012-05-10 04:54:47]
It's huaiwei...not huawei. I have nothing to do with the PRC! :)
 
connies4ever
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RE: Emirates Profit Slumps 72%

Thu May 10, 2012 1:53 pm

Historically, airlines both in the USA and outside have required massive capital injections to remain in business. Quite simply the record shows they have not actually made money since KLM was founded (1919 ?)

http://chartingtheeconomy.com/?p=1541

Note Warren Buffett's comments in this one:

http://www.msnbc.msn.com/id/3679292/...truggle-paths-profit/#.T6vHi1Kuk9g
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Pe@rson
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RE: Emirates Profit Slumps 72%

Thu May 10, 2012 1:59 pm

I wish such threads wouldn't inevitably descend into the same tired and cliched comments.
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
 
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EK413
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RE: Emirates Profit Slumps 72%

Thu May 10, 2012 2:11 pm

Even though profits have dropped guarantee EK announce another billion $$$ profit...

EK413
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Pe@rson
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RE: Emirates Profit Slumps 72%

Thu May 10, 2012 2:19 pm

Quoting EK413 (Reply 12):
Even though profits have dropped guarantee EK announce another billion $$$ profit...

EK itself (the airline) earned $409m.
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
 
PanHAM
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RE: Emirates Profit Slumps 72%

Thu May 10, 2012 2:45 pm

Right, that is roughly 300 million € on sales of roughly € 12,750 Billion which stands against LH sales of € 28 734 billion with a resulting operational profit of € 820,00 million.

Good show, LH, I'd say, under much rougher conditions than EK enjoys. (Unions, social contributions, legal system etc.)
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huaiwei
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RE: Emirates Profit Slumps 72%

Thu May 10, 2012 3:05 pm

Quoting PanHAM (Reply 14):
under much rougher conditions than EK enjoys. (Unions, social contributions, legal system etc.)

But most legacy European and American carriers had a much earlier headstart during times when such "rough conditions" were still in their infancy decades ago. That the recent upstarts have risen to rival the older airlines despite the current operating climate is surely something to be lauded.
It's huaiwei...not huawei. I have nothing to do with the PRC! :)
 
PanHAM
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RE: Emirates Profit Slumps 72%

Thu May 10, 2012 3:40 pm

It is always comparing apples and peaches when companies based in such different countries like the UAE and Germany are compared. If you can get the EBITDA from EK to show against the 2.546 Billion EBITDA of LH we would even have a better comparison.

Now, EK is owned by the UAE government whereas LH is a private company, listed at the FRA stock exchange which gets slammed wth taxes and ETS trades by the German government. Besides that they have to observe all kind of laws, rules and regulations in a state ruled by the law where every citiuzen can sue the government, a company or any other authority. The UAE is ruled by decret. No need to say anmore.
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MaverickM11
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RE: Emirates Profit Slumps 72%

Thu May 10, 2012 3:51 pm

Quoting huaiwei (Reply 15):
But most legacy European and American carriers had a much earlier headstart during times when such "rough conditions" were still in their infancy decades ago.

True, and by comparison it's only going to get more difficult and competitive for EK, especially if India and Pakistan ever gets their house in order.
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will777
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RE: Emirates Profit Slumps 72%

Thu May 10, 2012 4:23 pm

Quoting something (Reply 6):
because they're profitable (~ it works). If they weren't, EK could hardly be called an ''achievement

This applies to literally any business in the entire world. If Apple lost money, they wouldn't be here anymore. But no, it is one of the most profitable companies in the world and continues to grow at amazing rates.

If Emirates is profitable, clearly they are doing something right, and they should continue to expand.
 
PanHAM
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RE: Emirates Profit Slumps 72%

Thu May 10, 2012 4:59 pm

Quoting will777 (Reply 18):
This applies to literally any business in the entire world. If Apple lost money,

Apples are apples and peaches are peaches.

Apple is a manufacturer and airlines are service industry. You cannot compare manufacturers and service businesses both directly.

Does not even work in the same country.
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HachikoDog
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RE: Emirates Profit Slumps 72%

Thu May 10, 2012 6:06 pm

I´ll drink to that. EK has always been overpraised airline. Don´t know why... Because of IFE? Or B77W´s? There are a lot of better airlines than EK. Even in "low cost" concept...
 
something
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RE: Emirates Profit Slumps 72%

Thu May 10, 2012 6:26 pm

Quoting LAXtoATL (Reply 7):
Curious do you even know what interest rates EK pays on their capital?

I don't, but it's a logical inference. Their default risk, with Abu Dhabi behind them, is practically zero. They also don't pay taxes and they don't have shareholders, ie they can repay their credits as freely as they please. EK can virtually use their entire profit for investments/depreciation. LH can't. A.) Legally, they can't depreciate more than their profits and B.) They need to pay off stake- and shareholders with about 2/3 of their profits, rendering their credit period - per default - 66% longer than that of EK.

Also, EK can also order in larger quantities than LH can. Buying 100 A380s will obviously get you a cheaper unit-price than buying 20 of them. Even if LH wanted to buy that many A380s, they could never find creditors to raise that much capital.

Quoting LAXtoATL (Reply 7):
And to suggest they don't do hub feeding is just asinine! That is all they do, DXB is one of the largest airports in the world (pax traffic), not because Dubai is some sort of massive business center or tourist destination but because Emirates funnels almost all of its traffic through their DXB hub! I would bet their connecting traffic at their DXB hub is probably the largest percentage of any airline in the world, and certainly top 5.

Interesting. They can't seem to emphasize enough how valuable of a destination Dubai is, and that only 42% (or so) of their traffic are transits. If that isn't true, and DXB is as you say, nothing but an airport, what incentive would Germany have to grant EK more landing rights? Trade is quid pro quo, so if EK can suck all of the passengers out of Germany, what will the German airlines get in return? Germany has a population of 82m., Dubai has 0 if as you say, nobody leaves or enters the airplane there.

Quoting LAXtoATL (Reply 7):
Not sure what you mean by supported by government. "Most major airlines" are supported by the government behind them. And all major airlines follow regulations!!! In fact they all follow the same regulations, because everywhere they fly they must adhere to the local regulations in place!
EK wants a new airport, they get it. EK doesn't want a ban on night flights, so there's none. EK doesn't want unions, so there are none. EK doesn't want labor protection, so there is none (hire today, fire tomorrow). EK doesn't want to pay benefits to their employees, or at least their employee's dependents, so they don't have to. I could extend this list for quite a bit.

Why? Because the government creates the most convenient business environment for EK, whereas in Western democracies, like it or not, the people create the business environment for the companies by being able to vote on what is cool and what is not. Night flights for example, are usually voted ''not cool'' in most countries. Ask LH what that is doing to their bottom line.

Quoting LAXtoATL (Reply 7):
But I don't see how this is relevant. I have heard no complaints about former Emirates employees who were unjustly fired. I also hear very few complaints from employees about the airline mistreating or under paying them. Which ironically is quite unique, since that is a common complaint from employees of "most major airlines".

If having a boy- or girlfriend is a just cause for your employment's termination, to name just one of the many reasons people have gotten fired for, then you're probably right.

Quoting LAXtoATL (Reply 7):
in other words there is nothing unique to Emirates.

Of course EK isn't unique. There are also Qatar, Oman, Etihad, Gulf Air etc. Heck, not even their business idea is unique as it's almost an identical copy of Singapore Airlines. They even copied Silk Air with FlyDubai. So I absolutely agree. EK isn't unique at all.

Quoting huaiwei (Reply 15):
That the recent upstarts have risen to rival the older airlines despite the current operating climate is surely something to be lauded.

Don't get me wrong, I do find the whole EK operation very impressive and laudable. More companies should be like them in many ways. Many of their marketing strategies are genius. But it's all been done before (SQ) and secondly, more companies probably would be like them if they had the means to. In view of those facts, I just don't find their results very impressive. They're decent and testament of the viability of their business model. If they [the numbers] weren't [decent], then what would EK be other than a failed dream, is what I'm trying to say. They make money, their model works, good for them, other airlines can learn things from them, but in light of what others are doing under much rougher conditions, EK are nothing new under the sun.

[Edited 2012-05-10 11:36:29]
..sick of it. -K. Pilkington.
 
FURUREFA
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RE: Emirates Profit Slumps 72%

Thu May 10, 2012 6:27 pm

Quoting PanHAM (Reply 8):
As something already said, put that in relation with the work conditions LH and AF/Kl have to live and deal with and the profit is not that bright at all. And, making that statement, I assume that they pay market prices for fuel.

Right, but in the end, it doesn't matter. If France wants more competitive airlines in the global market, then perhaps it should modify its work requirements and taxation levels. That's the thing with global trade.

It's not EK's fault they are headquartered in a country with low taxes, just like it's not AF's fault it operates in a country with regulatory policies that are hostile to business and investment.

Quoting something (Reply 6):
If ''most major airlines'' raised capital under the same low interest rates, if ''most major airlines'' didn't have to do regional/domestic flying and hub feeding, if ''most major airlines'' could hire and fire people willy-nilly, if ''most other major airlines'' were supported by the government behind them and weren't tied to regulations, they'd be profitable too.

Show me the rates at which EK raises capital? Do you know at what rate they most recently floated their debt? I remember hearing that last year they raised about $500 million at an interest rate of about 4% - that's what one would expect for a corporation of that size and stability.

Likewise, no airline has to do regional/domestic flying and hub feeding. The airline industries in the US (apart of EAS) and Europe are unregulated. They only fly the routes they do out of choice and strategy. No one forces DL to fly to AGS.
 
PanHAM
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RE: Emirates Profit Slumps 72%

Thu May 10, 2012 8:43 pm

Quoting something (Reply 21):
They need to pay off stake- and shareholders with about 2/3 of their profits

In bad years the shareholders get nothing, in not so good years they get 0,25 € per share 8for 2011) and in the best year ever it was - i think € 1,10. In any case, 1/3 for the shareholders, 1/3 for the employees as boni and 1(3 retained in the company.

Quoting something (Reply 21):
Even if LH wanted to buy that many A380s, they could never find creditors to raise that much capital.

That's not LHs ppolicy anyhow. i have shown here how EK finances some of their assets. LH is a bit more conservative. I don't have the time to analyse the annual returns, but EK is by far in a batter position, I mentioned that here as well.

Quoting FURUREFA (Reply 22):
It's not EK's fault they are headquartered in a country with low taxes,

There's nothing about fault, in business it's about facts. facts only is what companies have to cope with. Politics and business have different interestes, except in well run countries like Singapore. France or Germany won't change their social laws, the poltics are populistics and the industry is the cash cow that keeps it running.

In Dubai, the state owns not only the airline but the airport, the handling company, it runs the aviation authorities and most important, it sets the game rules as well. These are the facts, European, Asian and American airlines have to cope with.
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greenwichsud
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RE: Emirates Profit Slumps 72%

Thu May 10, 2012 9:30 pm

my my..

Just a few short years ago (when the A380 orders started rolling in) EK was the toast of Europe on these boards. The rhetoric has changed dramatically (a near 180 degree turn) now that it is clear just what they intended to do with all that capacity.

Quoting FURUREFA (Reply 22):
Likewise, no airline has to do regional/domestic flying and hub feeding.

I've always wondered how this model would work in the US - an airline that connected only the top 15-20 key domestic cities with reduced frequency and larger aircraft and placed a larger focus on international flying. Presumably that model is not workable here as no carrier seems to be moving wholeheartedly in that direction.
 
KAL7478
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RE: Emirates Profit Slumps 72%

Thu May 10, 2012 10:35 pm

Quote HachicoDog "I´ll drink to that. EK has always been overpraised airline. Don´t know why... Because of IFE? Or B77W´s? There are a lot of better airlines than EK. Even in "low cost" concept..."

I beg to differ here, IMO EK has done well enough to deserve praise....Their IFE is one of the best if not the best in the business and 77W's are once again IMHO the best all around commercial aircrafts out there.
If it also happens to be the back bone of their fleet well that is a good thing, the bit about (a lot of other airlines better than Ek that is definitely up for debate).....
 
SuperCaravelle
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RE: Air Tahiti Nui Chooses Oneworld

Thu May 10, 2012 11:00 pm

Look at how many EU airlines still serve Dubai, some even adding flights. It indicates both that EK is not on another planet and that Dubai is not only a transit hub, but also a important city on it's own.

[Edited 2012-05-10 16:01:50]
 
FURUREFA
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RE: Emirates Profit Slumps 72%

Thu May 10, 2012 11:43 pm

Quoting PanHAM (Reply 23):
Quoting FURUREFA (Reply 22):
It's not EK's fault they are headquartered in a country with low taxes,

There's nothing about fault, in business it's about facts. facts only is what companies have to cope with. Politics and business have different interestes, except in well run countries like Singapore. France or Germany won't change their social laws, the poltics are populistics and the industry is the cash cow that keeps it running.

In Dubai, the state owns not only the airline but the airport, the handling company, it runs the aviation authorities and most important, it sets the game rules as well. These are the facts, European, Asian and American airlines have to cope with.

Right, so the fact is that EK operates in an environment that is conducive to increasing capital growth, business, and investment. "Well run" is certainly a term that is subjective - I would argue that, in some ways, the UAE is indeed well run; do I agree with the government's social policies and every fiscal policy? Absolutely not, but that doesn't mean that their business-friendly practices make the country "poorly run".

Quoting greenwichsud (Reply 24):

Quoting FURUREFA (Reply 22):
Likewise, no airline has to do regional/domestic flying and hub feeding.

I've always wondered how this model would work in the US - an airline that connected only the top 15-20 key domestic cities with reduced frequency and larger aircraft and placed a larger focus on international flying. Presumably that model is not workable here as no carrier seems to be moving wholeheartedly in that direction.

I don't think it would work either, but no one forces US carriers to do so.
 
ElPistolero
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RE: Emirates Profit Slumps 72%

Fri May 11, 2012 12:20 am

Quoting something (Reply 21):
Why? Because the government creates the most convenient business environment for EK, whereas in Western democracies, like it or not, the people create the business environment for the companies by being able to vote on what is cool and what is not. Night flights for example, are usually voted ''not cool'' in most countries. Ask LH what that is doing to their bottom line.

Yes, but in other countries they are a fact of life. Most of India's international flights used to operate at night to get into Europe early AM. Flying patterns have been dictated by Europe to a large degree - with their limited hours, airlines around the world have to operate at all hours to make sure they can use their slots.

Not much sympathy there, I am afraid. Democracy means many things, but it does not mean NIMBYISM. If a democratic state cannot figure out what is in the national interest, choosing instead to bow down to one small group, then it isn't functioning very well. Some might even say that in cases like LHR and FRA, its a case of the tyranny of the minority.

These are, ultimately, self-inflicted wounds. Airplanes are noisy? Yes. Don't like it? Move elsewhere or soundproof your house.

Quoting something (Reply 21):
If having a boy- or girlfriend is a just cause for your employment's termination, to name just one of the many reasons people have gotten fired for, then you're probably right.

I suppose. But then again, we live in a world where, despite the law, an employer can choose to not hire someone on the basis of their race, sexual orientation etc. The only catch is that the employer can't admit that was his reasoning. Granted, its difficult to fire someone if you never hire them in the first place. But then again, there is something to be said for honesty. I mean, one need only look at the waiting list for 'black' students at traditionally 'white' schools in the Netherlands to know that discrimination may be illegal, but the loopholes ensure that it persists.

Quoting greenwichsud (Reply 24):
Just a few short years ago (when the A380 orders started rolling in) EK was the toast of Europe on these boards. The rhetoric has changed dramatically (a near 180 degree turn) now that it is clear just what they intended to do with all that capacity.

Everyone's great. Till they become a threat. AC was quite willing to let EK in. All they wanted was 50% of the EKs profits, without actually spending a dime or investing anything on YYZ-DXB (think freeloading). EK said no, and the rest is history.

Quoting HachikoDog (Reply 20):
I´ll drink to that. EK has always been overpraised airline. Don´t know why... Because of IFE? Or B77W´s? There are a lot of better airlines than EK. Even in "low cost" concept...

If there is a list of the most pointless post on a.net, this will definitely make it.

Quoting SuperCaravelle (Reply 26):
Look at how many EU airlines still serve Dubai, some even adding flights. It indicates both that EK is not on another planet and that Dubai is not only a transit hub, but also a important city on it's own.

Either that, or AF flies pax to DXB so that they can connect to Mauritius or India. I quite enjoy the way people like belittling this little country.

Is EK a great airline? Not really. Has what it done for Dubai impressive? Probably.
 
juantrippe82
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RE: Emirates Profit Slumps 72%

Fri May 11, 2012 12:32 am

Quoting greenwichsud (Reply 24):

There was an airline like that, I think it was called Pan Am . And we all know how that turned out.
Don't worry, I'm never wrong.
 
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huaiwei
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RE: Emirates Profit Slumps 72%

Fri May 11, 2012 2:05 am

Quoting PanHAM (Reply 16):
Now, EK is owned by the UAE government whereas LH is a private company, listed at the FRA stock exchange which gets slammed wth taxes and ETS trades by the German government. Besides that they have to observe all kind of laws, rules and regulations in a state ruled by the law where every citiuzen can sue the government, a company or any other authority. The UAE is ruled by decret. No need to say anmore.

Yes, and so LH and its predecesors were never government owned? Really?

Read my comment again, as I implied that EK is now growing at a stage of its history similar to how most modern Western carriers today used to be government-supported or owned during their growth spurts, which is often the most challenging periods for a company. Once the market and the company stabilises, and the airline has archieved significant market share, they are better able to survive after privatisation.

Hence I find that it reeks of double standards when people insist upstarts from less developed economies should operate in the same social/politica/economic environment as their peers in more developed economies, just because they are now direct competitors.

As many has said, it is not EK's fault that it's government adopted business-friendly policies. As thriving democracies, western nations have only themselves to blame if they continue to elect populist governments who are not neccesarily doing the things companies desire.

Quoting something (Reply 21):
more companies probably would be like them if they had the means to.

Again, it is the company's choice. May I also point out that although the aviation industry is one of the most regulated ones around, companies ambitious and determined enough can find ways to plant themselves in places with more favourable business climates. Some airlines buy up stakes in other carriers precisely for this purpose, and where politically/jurisdically possible, even establish wholely-owned subsidiaries there.

Qantas is one example of a company trying to uproot themselves from their homeland and implant themselves in Asia to ensure their own long-term survival, although of course we know it was met with domestic opposition. But if the business gets to run the way it should be run, it is exactly the best way forward for them. So ultimately, let us blame less on the circumstances beyond our control, and focus on how best we can take full advantage of any available opportunities open to us.

[Edited 2012-05-10 19:06:18]
It's huaiwei...not huawei. I have nothing to do with the PRC! :)
 
flightsimer
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RE: Emirates Profit Slumps 72%

Fri May 11, 2012 2:52 am

Quoting juantrippe82 (Reply 29):

I was thinking the same thing, but when deregulation came, it did not allow PanAm to expand what little of a domestic route system it had on its own. Therefore, to keep from loosing all it's market share to the other airlines that had Domestic markets, it was forced into buying airlines which had a domestic system. When they bought national they paid way too much and could never recover from it.

I could see a new airline being able to do it successfully if they chose to do that type of airline.
Commercial Pilot- SEL, MEL, Instrument
 
cheeken
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RE: Emirates Profit Slumps 72%

Fri May 11, 2012 2:55 am

Quoting huaiwei (Reply 9):
Meanwhile, SQ's profits also plunged 69% for the Jan-Mar 2012 period. It must be a truly pathetic airline to do this badly despite all the advantages!

I think EK has the huge advantage of having a website that works...   
 
docpepz
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RE: Emirates Profit Slumps 72%

Fri May 11, 2012 3:06 am

SIA's bond yields are 2.15%, while when EK issued bonds they had a coupon rate of 5.1%. As such, SQ can raise money at much lower interest rates (but they are sitting on billions of dollars of cash, so only issue bonds every now and then just for purposes of rebalancing their balance sheet)

http://www.reuters.com/article/2010/09/21/sia-idUSSGE68K00520100921

http://gulfnews.com/business/aviatio...-dives-as-travel-picks-up-1.991888

This is largely because Singapore's sovereign rating is rated higher than the UAE, and Singapore generally has extremely low interest rates for a variety of reasons (safe haven flows, enormous liquidity in the banking system, etc) . For example, I can get a housing loan at 1% interest or less these days, compared to an Australian who has to pay 6% to borrow in AUD in his own country, or even an American who has to pay 4%.

The income tax I would pay in Singapore on $100k USD is around 5% after deductions, whereas for someone in Australia or the US it would be 25-30%.

Is it my fault that I can get access to capital far more cheaply than an American or Australian, or that I have access to a lower tax regime? Is it SQ's fault that they can raise capital cheaply in Singapore (as with any other company who wants to issue SGD bonds) In the same vein, is it EK's fault that they come from a tax free state, and also can raise capital fairly easily?

If low taxes, no night curfew and access to a flexible labour force is the be all and end all, then Etihad and Qatar Airways should be making billions today. Alas, they're not even profitable or barely breaking even. So Emirates obviously is doing something right.
 
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RE: Emirates Profit Slumps 72%

Fri May 11, 2012 3:15 am

Quoting something (Reply 21):
Their default risk, with Abu Dhabi behind them, is practically zero.

EY competes with EK. If anything, Abu Dhabi has been trying to curb there once lesser cousin.

Quoting something (Reply 21):
EK wants a new airport, they get it. EK doesn't want a ban on night flights, so there's none.

I remember once upon a time Western nations tried to expand their transportation options. I've posted many a time on a.net that I have a theory that the mid-east hubs were incubated in an environment of night-curfews and lack of European hub expansion that allowed their rapid growth. That isn't a fault. For service to and from Europe, middle of the night operations are required for a mid-east or Indian based hub. It is adapting to a competitive necessity.

Quoting greenwichsud (Reply 24):
Presumably that model is not workable here as no carrier seems to be moving wholeheartedly in that direction.

For the model to work, limited bilateral rights need to be present.


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RE: Emirates Profit Slumps 72%

Fri May 11, 2012 5:43 am

Quoting KAL7478 (Reply 25):
Quote HachicoDog "I´ll drink to that. EK has always been overpraised airline. Don´t know why... Because of IFE? Or B77W´s? There are a lot of better airlines than EK. Even in "low cost" concept..."

I beg to differ here, IMO EK has done well enough to deserve praise....Their IFE is one of the best if not the best in the business

Seriously, this is how we judge Airlines these days ?
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RE: Emirates Profit Slumps 72%

Fri May 11, 2012 5:52 am

Quoting huaiwei (Reply 30):
Yes, and so LH and its predecesors were never government owned? Really?

These were the days of national carriers, when infrastructure that was vital for the rest of the industry needed to be build up. We can talk about this again after EK went public, floated on major world stock exchanges and without any control of the Dubai government, not even a seat on the supervisory board. And no DXB stockholding as well.

Quoting huaiwei (Reply 30):
As many has said, it is not EK's fault that it's government adopted business-friendly policies. As thriving democracies, western nations have only themselves to blame if they continue to elect populist governments who are not neccesarily doing the things companies desire.

And I say again, in business it is not about fault it is only about facts. I made a compliment towards SIN saying that your country is efficiently run. I may add, at the expense of some democratic rights, but still a fairly free country. In the western democracies, the days of the realists will come because it is inevitable. In Germany, we are on the proper way, at least until the next election.

At the end of the day, countries like the UAE will have to learn that they have to live with some restrictions on traffic rights. Honestly, I cannot understand it anyway, they have exfcellent rigfhts in Germany, what the complaint really is
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RE: Emirates Profit Slumps 72%

Fri May 11, 2012 7:14 am

I would like to have more of a discussion of EK's actual operations.

For example, I find it interesting how cargo grew only 1.6%. Now, the prediction (below link) for 2011 was 1.4%. This implies that EK is basically 'treading water' from a market share perspective. But the anual report notes a shrinking world air cargo market (pg 8). Which is the case? Did cargo shrink or grow in 2011?

The available seat kilometers grew fractionally more than employees. Was this operational efficiency, the A380, or ???

http://www.aircargoworld.com/Air-Car...irfreight-growth-projection/212111

From the annual report, there were 11 new destinations:
Europe: Geneva, Copenhagen, St. Petersburg, Dublin
Regional: Baghdad,
Americas: Rio de Janeiro, Buenos Aires, Dallas-Fort Worth, Seattle
Africa: Lusaka, Harare

One sees the need for gauge growth (Europe/Americas seem to be bulk of growth by city count).

I would also like to discuss the available seat miles weighted load factor (annual report pdf pg. 43). The break even load factor went up 2.3 % while the actual load factor (when weighted by available seat kilometers/miles) dropped 2.2%! It looks like EK barely scrapped a profit and I speculate the last quarter of the reporting period was operated at a loss.

For the overall picture on EK shows they are under financial pressure. Some of that is self inflicted due to growth. How much due to regional competition? (QR/EY?)

I also note EK is definitely growing by frequency and gauge. Looking at pg. 129 of the annual report, I see they grew from 2002-03 from 46 aircraft to 169 and 64 destinations to 122. Or 367% of the aircraft to servie 191% of the cities.

EK is a very interesting airline due to its business model and growth.

Quoting something (Reply 21):
Of course EK isn't unique. There are also Qatar, Oman, Etihad, Gulf Air etc. Heck, not even their business idea is unique as it's almost an identical copy of Singapore Airlines. They even copied Silk Air with FlyDubai. So I absolutely agree. EK isn't unique at all.

Which has me curious to learn more about EK. Is it their first mover advantage? Superior hub banks versus the regional competition? Better fleet purchases? (e.g., ditching the A346 for the 77W?)

I also want to comment that EK's fleet turnover seems far slower than in the past. Until this year, they just were not rotating many aircraft out of the fleet. (IIRC, we'll see the A343s all leave the fleet in this fiscal year for EK.) I see, per pg 45 of the annual report, the 8 of the 10 A345s are leased. When do those circa 2003 aircraft have their leases expire? (e.g., are they 10 year leases or longer?) Do I recall correctly that the 77W leases expire in 2014?

One last question. How did so many A330-200s become owned by EK? The prior annual report had one owned by EK. All of the financial leases on the A332 were bought out and it looks as if one operating lease either expired or was bought out. Did EK just sell enough bonds that buying out the financial lease was the cheapest option?

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RE: Emirates Profit Slumps 72%

Fri May 11, 2012 7:15 am

How can their profit drop almost completely out of the floor only in 2011 because of the price on oil, if their claim that they always had paid for their fuel?!

I think 2011 was the first year they did this, welcome to reality UAE...

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RE: Emirates Profit Slumps 72%

Fri May 11, 2012 7:46 am

Quoting lightsaber (Reply 37):
Which is the case? Did cargo shrink or grow in 2011?

yes, started in the second half. EK is bstill doing well, they have an excellent cargo team. They invest a lot in marketing. They have excellent conditions at their home airport, benefit from sea air with transit times from container yrad in Jebel Ali to aircraft in 6 hours. They have no curfews, no restrictions European carriers have. Makes live easier and they use the benefits.

Quoting lightsaber (Reply 37):
t looks like EK barely scrapped a profit and I speculate the last quarter of the reporting period was operated at a loss.

Compare LH and EK figures and they are pretty much on par. EK shows an EBITDAR which is better than LH's EBITDA but then it has to be analized how much the "Rent" is and what they understand as rent, If leasing is included than I'd say they had a really bad year.
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RE: Emirates Profit Slumps 72%

Fri May 11, 2012 8:32 am

Quoting PanHAM (Reply 36):
Honestly, I cannot understand it anyway, they have exfcellent rigfhts in Germany, what the complaint really is

Complaint is that limiting rights costs jobs and denies local service to those customers who wish it.

The only people who benefit are LH's shareholders.

If the UK can manage EK serving 7 airports why can't Germany with 20million more citizens? BA still (occasionally) makes a profit why can't LH?
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RE: Emirates Profit Slumps 72%

Fri May 11, 2012 8:47 am

Quoting ElPistolero (Reply 28):
Democracy means many things, but it does not mean NIMBYISM. If a democratic state cannot figure out what is in the national interest, choosing instead to bow down to one small group, then it isn't functioning very well. Some might even say that in cases like LHR and FRA, its a case of the tyranny of the minority.

You don't understand the term 'democracy' then. Democracy is a form of self-governance. That's why the US Americans can have their death penalties and why Danes can have their social securities. France can have as many nuclear reactors as they like, Germany will have none from 2020 on. Germany could forbid aviation altogether if the people there wished that. This 'ulterior motive' or 'greater good' thought you seem to think is defining of a democracy is actually the one of the defining elements of communism.

Quoting ElPistolero (Reply 28):
I mean, one need only look at the waiting list for 'black' students at traditionally 'white' schools in the Netherlands to know that discrimination may be illegal, but the loopholes ensure that it persists.
Quoting ElPistolero (Reply 28):
Either that, or AF flies pax to DXB so that they can connect to Mauritius or India.

Nobody connects through DXB on their own. Look at the airport's layout.

Quoting ElPistolero (Reply 28):
I quite enjoy the way people like belittling this little country.

Dubai is not a country.

Quoting huaiwei (Reply 30):
As many has said, it is not EK's fault that it's government adopted business-friendly policies. As thriving democracies, western nations have only themselves to blame if they continue to elect populist governments who are not neccesarily doing the things companies desire.

I am not blaming anybody. I am just saying that EK's success was made possible by circumstances other companies didn't have.

Quoting Docpepz (Reply 33):
SIA's bond yields are 2.15%, while when EK issued bonds they had a coupon rate of 5.1%.
EK borrows money at around 3-4 percent.

Quoting Docpepz (Reply 33):
Is it my fault that I can get access to capital far more cheaply than an American or Australian, or that I have access to a lower tax regime? Is it SQ's fault that they can raise capital cheaply in Singapore (as with any other company who wants to issue SGD bonds) In the same vein, is it EK's fault that they come from a tax free state, and also can raise capital fairly easily?

It's good for them. I am not an EK hater. I just don't find their business model impressive.

Quoting Docpepz (Reply 33):
So Emirates obviously is doing something right.

They are. They have understood that approaching business conservatively isn't always the right thing to do. LH buys A380s because their demand, and match it with a suitable aircraft. EK on the other hand, seems to do things the ''build it, and they will come..'' way. Look at that Burj Khalifa project. I doubt it'll ever earn money - directly. But it is a huge attraction and people come to Dubai, among other things, because of the impressive architecture. And that is a spirit I miss in Europe. Putting money first, and expecting people to do as you tell them, as opposed to listening to what the people want (ie flying in big aircraft, as opposed to narrow bodies) and then be rewarded with their business.

Of course Dubai carries a huge financial risk. Those widebodies and big buildings can become a liability..

Quoting lightsaber (Reply 34):
Quoting something (Reply 21):
Their default risk, with Abu Dhabi behind them, is practically zero.

EY competes with EK. If anything, Abu Dhabi has been trying to curb there once lesser cousin.

Dubai was on the brink of defaulting and was then saved by a $10bn. bail out by Abu Dhabi. If Dubai goes bankrupt, they're taking EK with them.

Quoting PanHAM (Reply 36):
At the end of the day, countries like the UAE will have to learn that they have to live with some restrictions on traffic rights.

I don't see the restrictions, honestly. They're getting much more out of Germany, than Germany is getting out of them. That's hardly a restriction.

Their new document tries to argue otherwise, but I have yet to read it to comment on that.

Quoting lightsaber (Reply 37):
Which has me curious to learn more about EK. Is it their first mover advantage? Superior hub banks versus the regional competition? Better fleet purchases? (e.g., ditching the A346 for the 77W?)

They embody the ''go big or go home'' approach to business. They throw multiple daily widebody frequencies at regional airports. Qatar's spotty 3-weekly A319 network is just not doing it for the needs of most travellers. EK can single-handledly offer the connection and schedule convenience that would otherwise take the cooperation of 2-3 airlines.

Quoting lightsaber (Reply 37):
Until this year, they just were not rotating many aircraft out of the fleet. (IIRC, we'll see the A343s all leave the fleet in this fiscal year for EK.) I see, per pg 45 of the annual report, the 8 of the 10 A345s are leased. When do those circa 2003 aircraft have their leases expire? (e.g., are they 10 year leases or longer?) Do I recall correctly that the 77W leases expire in 2014?

The ''fleet rollover'' was said to begin in 2012 but was then postponed because they need the lift of these aircraft for longer than anticipated. Delays of other aircraft or faster than anticipated growth should be the drivers.

Quoting lightsaber (Reply 37):
One last question. How did so many A330-200s become owned by EK? The prior annual report had one owned by EK. All of the financial leases on the A332 were bought out and it looks as if one operating lease either expired or was bought out. Did EK just sell enough bonds that buying out the financial lease was the cheapest option?

They need the aircraft and buying them out of their leases might have been the cheapest, or even only feasible option for them.

Quoting vegetables2001 (Reply 40):
If the UK can manage EK serving 7 airports why can't Germany with 20million more citizens? BA still (occasionally) makes a profit why can't LH?

Protectionism, if you will. Business is always quid pro quo. EK is getting much more quid for the quo they're giving.

[Edited 2012-05-11 01:50:16]
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RE: Emirates Profit Slumps 72%

Fri May 11, 2012 9:52 am

Quoting vegetables2001 (Reply 40):
Complaint is that limiting rights costs jobs and denies local service to those customers who wish it.

well, thanks for reminding me. Why don't you complain to your boss that he does not pay you a million quid per month , yu could boost the eocnomy that way and create jobs.

Seripously, EK has generous traffic rights. They can chose between 49 flights per week to 7 destinations or unlimited nukmber of flights per week , any aircraft size to 4 destinations.

The destinations they have cjose are strategically localed so they can servie the whole of Germany. no resident here is denied local service. The 2 airports in question , BER and STR have QR service, BER has EY service on top of that.


Quoting vegetables2001 (Reply 40):
If the UK can manage EK serving 7 airports why can't Germany with 20million more citizens? BA still (occasionally) makes a profit why can't LH?

LH has not only been occasionally profitable but consistently . Contrary to BA, aka as Air London, LH as never given up the secondary and tertiary airports in Germany. They are serving their home market. An airline that does not, leaving wide gaps, has no reason to complain when those gaps are filled.

Quoting something (Reply 41):
I don't see the restrictions, honestly.

Me neither, see above. EK sees it that way and they will until they have gained access to BRE, HAJ, FMO, NUE LEJ DRS and whatever else as well. OK, won't happen....
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RE: Emirates Profit Slumps 72%

Fri May 11, 2012 11:27 am

Quoting something (Reply 41):

You don't understand the term 'democracy' then. Democracy is a form of self-governance. That's why the US Americans can have their death penalties and why Danes can have their social securities. France can have as many nuclear reactors as they like, Germany will have none from 2020 on. Germany could forbid aviation altogether if the people there wished that. This 'ulterior motive' or 'greater good' thought you seem to think is defining of a democracy is actually the one of the defining elements of communism.

No, I am afraid it is you who have misinterpreted democracy. Democracy is meant to be self-governance, but in the day-to-day realities of this world, democracy is compromised by (deliberately) powerful executives (PM/Cabinet), party whips and party discipline. The latter two are about as anti-democratic /communist (as you call it) as they come - last thing any MP wants to do is get thrown out of the party. Whether they represent the will of those who elected them, or the will of their party leader....its a grey area at the best of times.

Which is why your form of 'self-governance' in the UK will never allow the laws to be changed to support, say, internet piracy. Many people do it. If you put up a national referendum, I suspect more people would vote for free downloading than wouldn't. But will that question ever be posed to the public? Probably not, because democracies use the executive to temper populism in the name of the 'greater good'.

As for the death penalty, it is not a function of US democracy. It is a function of federalism. Sure the majority of people in some states might support it, but that does not mean that all Americans will vote for it if it is put to a national vote.

Quoting something (Reply 41):
Protectionism, if you will. Business is always quid pro quo. EK is getting much more quid for the quo they're giving.

Its simplistic to look at aviation as separate from two countries relationships. Its part of an overall agreement and I guess the UK, as a whole, is gaining as much as it is giving to the UAE, as a whole.

Quoting PanHAM (Reply 42):

LH has not only been occasionally profitable but consistently . Contrary to BA, aka as Air London, LH as never given up the secondary and tertiary airports in Germany. They are serving their home market. An airline that does not, leaving wide gaps, has no reason to complain when those gaps are filled.

Still begs the questions - why is it left to LH to decide if it is meeting the consumers needs in secondary / tertiary markets. LH determines the schedules for these secondary markets, no? Why should some Germans have to fly through FRA because LH deems it fit, while other get to fly directly to their destination? In other words, if LH thinks it has the country properly covered, then why is it afraid of losing passengers? And on a more fundamental level, why would the government discriminate against its own people by forcing them to fly LH, just because LH has deigned to send a few aircraft to their 'secondary/tertiary' market? LH may have service, but that doesn't mean that, for consumers, it is cost-effective or convenient.

Right now, we have LHs word that it is doing enough. But the fear of EK suggests that they are afraid that if people have a choice, LH might not be it. What gives?
 
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RE: Emirates Profit Slumps 72%

Fri May 11, 2012 12:30 pm

Quoting ElPistolero (Reply 43):
Still begs the questions - why is it left to LH to decide if it is meeting the consumers needs in secondary / tertiary markets. LH determines the schedules for these secondary markets, no?

Nobody has to fly through FRA to get to DXB. People can fly via LHR, CDG, MUC, ZRH, VIE, DOH, there is ample choice. Price wise it is competetive as well. If DXB is your destination you are likely better of with any other carrier than EK. However,m aqs ,market dictates matters, there won't be enough business form BER or STR to DXB to justify a direct flight.

Only transit beyond makes such flights evebntually profitable. Those people you are pitying, living in such secondary markets like STR or BER do not have direct flights to many overseas destinations, but those who live close, within 60 minutes to an airport, always have a ultiple choice of connecting cities. Then there are at least 40 million or so in the polycentric country who have more than 100 minutes to reach the nearest airport. People living in STR can reach FRA in 70 minutes, EK is on their doorstep.

The country has an excellent infrastructure by rail and road. So, what seems to be the problem? If 10 fligthts a day with the majority 773 in which EK jams more tna 400 pax are not enough, they can add frequencies. Or switch to 380s. What does EK really want they not already have?




Quoting ElPistolero (Reply 43):
would the government discriminate against its own people by forcing them to fly LH

No one in this country is forced to do anything, except paying taxes. It is completely up to the individuals to fly what they want when they want and where they want and no one has to travel thousands of miles to reach an airport with EK service, as in Canada. For those who live in BER or STR, EK is 70 mins resp. 120 minutes away.
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RE: Emirates Profit Slumps 72%

Fri May 11, 2012 1:11 pm

Quoting PanHAM (Reply 44):

Ah yes, I keep ignoring high speed rail links (our rail infrastructure here in Canada is a bit.... outdated). I see your point with STR, but I do find BER an odd case. As a capital enjoying something of a cultural renaissance, I really feel that it could benefit from more direct flights (and no, not just EK). Which major airport is BER close to?

But of course, living in Canada, I m also quite sick and tired of Canadians on a.net insisting that we have 'enough' choice, which I find about as contradictory as a 'regulated free market'. Hence my questioning of this notion that a market is served well enough. Is that for the airline to decide or the consumer?

To be honest, I don't think EK needs more access - my support for EK in Europe is based almost exclusively in the hope that the competitive pressure will result in a better product on the EU carriers. Living in Canada, my choices on eastbound are essentially limited to EU carriers that are generally not very good in Y - especially compared to EK. AF 777 or EK 777? EK 380 or LH 380? In Y, EK comes out on top. Not that I fly EK. Personally, I much prefer TK and I hope they get a daily frequency to Canada by next year.

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RE: Emirates Profit Slumps 72%

Fri May 11, 2012 1:44 pm

Quoting ElPistolero (Reply 45):
ut I do find BER an odd case. As a capital enjoying something of a cultural renaissance, I really feel that it could benefit from more direct flights (and no, not just EK). Which major airport is BER close to?

BER had three airports and if they are keep going the way they are it will be zero by the end of the year. Anyhow, BER has an airport, but the catchment area is relatively small and does not warrant international flights, except a few spokes to US hub and now they have AUH through the EY affiliating with AB. . If they get btheir act together and finally open the new BER terminal sometime this year, a mini hub for AB might do it.

If you insist flying EK ex BER instead of QR or EY/AB, drive to HAM or take the ICE train that takes you in 90 mins to HAM central station and another 20 minutes by suburban train, puts you right smack in the ternminal building, 2 flights EK to DXB daily. I guess London /Ont. to Malton takes longer. Also, it is amazing that so many people insit on flying EK to connect to somewhere when LH flies them N/s from FRA or MUC to their destination. You name the place and there are multiple choices from each corner of Germany to anywhere in the world.
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RE: Emirates Profit Slumps 72%

Fri May 11, 2012 2:08 pm

Many airlines aren't doing (relatively) well under the current economic circumstances, SQ included. EK is no different. Emirates is a great marketing tool for the UAE and Dubai as it is just one of the many ways the country can showcase itself, the same way Singapore Airlines is considered a worldwide brand for the island nation. Both airlines' earnings were hurt by higher fuel costs.

The UAE and many western nations are at different stages of economic development and not only is their home market currently growing but so are many markets within the region. SIA benefits from the economic boom in India, China and South East Asia.

Unfortunately, Europe and the US don't have much economic potential for growth. This combined with uncompetitive economic restrictions such as high taxes and operating/labour costs automatically puts carriers from these regions at a disadvantage. This is no fault of EK or SIA, it's just natural economic growth and recessive cycles.

That being said, I don't find EK's on board products to be that great.

[Edited 2012-05-11 07:13:58]
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RE: Emirates Profit Slumps 72%

Fri May 11, 2012 3:15 pm

Quoting Pe@rson (Reply 13):

Quoting EK413 (Reply 12):
Even though profits have dropped guarantee EK announce another billion $$$ profit...
EK itself (the airline) earned $409m.

My bad, didn't read the article prior to my statement....

Quoting KAL7478 (Reply 25):
I beg to differ here, IMO EK has done well enough to deserve praise....Their IFE is one of the best if not the best in the business and 77W's are once again IMHO the best all around commercial aircrafts out there.
If it also happens to be the back bone of their fleet well that is a good thing, the bit about (a lot of other airlines better than Ek that is definitely up for debate).....

Ain't going to argue your points as I too believe they have probably one of if not the best IFE but I certainly don't agree on EK having the greatest in flight service... SQ blows EK no doubt about it hands down...

Quoting lightsaber (Reply 34):
EY competes with EK. If anything, Abu Dhabi has been trying to curb there once lesser cousin.
Quoting something (Reply 41):
Dubai was on the brink of defaulting and was then saved by a $10bn. bail out by Abu Dhabi. If Dubai goes bankrupt, they're taking EK with them.

You beat me to it... During the world recession DXB was bailed out by AUH with a $10 billion bail out injection...

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RE: Emirates Profit Slumps 72%

Sat May 12, 2012 9:34 am

Quoting something (Reply 41):
Dubai is not a country.

But it is a city state as Qatar showed (early in the UAE), city states have the ability to leave the UAE.

In effect, each Emirate competes with the others. The UAE is a federation more than a nation.

Quoting something (Reply 41):
Dubai was on the brink of defaulting and was then saved by a $10bn. bail out by Abu Dhabi. If Dubai goes bankrupt, they're taking EK with them.

Agreed. But that was more due to Dubai's place in the regional banking system. It was due to if Dubai defaulted, they would have created a greater expense for Abu Dhabi than collecting on a loan. There were conditions placed on Dubai/EK due to that loan; I wish I knew the terms. During the worst of the crisis, Abu-Dhabi wanted to buy EK but Dubai set down their foot and said 'not for sale.'

That loan was also pressured by French banks ironically as without the loan, the European crisis would have been worse. If Dubai had defaulted, Abu-Dhabi would have been in trouble due to association. So they do compete and not-always in a friendly manner. (e.g., when EK tried to push from 6X/weekly to YYZ, EY stepped in and took half the slots).

In many ways Abu Dhabi would have lost their hold on the UAE if they didn't help Dubai. It was interesting how dragged out the bailout was.
FWIW, the loan was $20bn by the sources I find:
http://www.businessweek.com/news/201...-percent-interest-in-debt-proposal

In many ways, Abu Dhabi are analogous to Samsung and Apple. They are "frenimies." Abu Dhabi is dependent on Dubai for certain parts of their economy (logistics, banking despite competition) and is rather upset the weaker upstart has grown so fast.

Quoting something (Reply 41):
They embody the ''go big or go home'' approach to business.

It is more than that. Most 'go big or go home' business do not have the open accounting EK does. There annual reports are clearer than most airlines. For example, the details on leases that raise a.net questions. There is a reason regional headquarters do not have as tough a time bringing families to Dubai than Saudi or Abu Dhabi.

Dubai is far from perfect. There are warts. But 'sheikh Mo' seems to have read 'The Lexus and the Olive Tree' and "The Birth of Plenty' and is implementing policy to attract business. Now much of that policy is to copy Hong Kong or Singapore, so much is not original. But why are they the *only* ones willing to do so in the region?

Quoting something (Reply 41):
They need the aircraft and buying them out of their leases might have been the cheapest, or even only feasible option for them.

I can believe cheapest. But I wonder if this is an indication of further A332s rolling out of their fleet as the 77Ws and A380s enter the fleet this year and next. By HB-IWC's excellent analysis, the A332 is rarely being used for its range capability. My opininion is that it makes sense to rotate the type out of EK's fleet while resale values are excellent with 77Ws as they arrive (up-gauge).

Emirates At DXB - Ultimate Operational Analysis (by HB-IWC Sep 27 2010 in Civil Aviation)

Quoting PanHAM (Reply 46):
Anyhow, BER has an airport, but the catchment area is relatively small and does not warrant international flights, except a few spokes to US hub and now they have AUH through the EY affiliating with AB. . If they get btheir act together and finally open the new BER terminal sometime this year, a mini hub for AB might do it.

Why do you say it doesn't warrant international flights? It is a growing city and if certain industries are going to thrive, the number of international connections must grow. I believe once AB implements their hub *and* repairs their balance sheet more (which EY's investment was a crucial part of), then they will start an international expansion. At first slow, but growing. However, they will be handicapped, as with so many European airports, by the curfew.

Quoting PanHAM (Reply 46):
If you insist flying EK ex BER instead of QR or EY/AB, drive to HAM or take the ICE train that takes you in 90 mins to HAM central station and another 20 minutes by suburban train, puts you right smack in the ternminal building,

Every seat switch cuts the number of customers willing to take a transportation by 75%. Why? It seems the inconvenience is obvious. I have a cousin who design transportation cities (mostly for China today) and that many seat switches kill any business plan.

Lightsaber
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