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erikgrinsvall
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The Future of EK

Fri Jan 05, 2018 5:26 pm

A lot of questions remain at high interest after EK's turbulent time over the past months. High employee resignation rate, uprising loss of possession in AUS market, B787-10 order (somewhat too late) and dying flame in the future of the A380. What are we to expect from the legacy over the next upcoming years?

/E
 
Aither
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Re: The Future of EK

Fri Jan 05, 2018 6:02 pm

Considering the regions around EK are the most populous and fastest growing ones in the world + Etihad & Qatar not going so well, I think it's quite reasonable to think that EK still has a lot of potential to grow, in particular with the new airport.

787-10 serving smaller markets & schedule alignments with Flydubai will further boost the feed for the 77X & A380s. The "snowball" effect will continue, unfortunately for other airlines... that's why It's hard to imagine EK without the A380.
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dubaiamman243
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Re: The Future of EK

Fri Jan 05, 2018 6:27 pm

EK will be fine. EY and QR aren't the real competitors. Their real competitors are the ULCCs.
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ER757
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Re: The Future of EK

Fri Jan 05, 2018 6:37 pm

Why do you say the the 787-10 order was too late?
I think the A380 will soldier on in no small part due to EK - I am pretty well convinced they'll end up ordering more despite all the drama over the non-order at the DXB air show.
just my :twocents:
 
DWC
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Re: The Future of EK

Fri Jan 05, 2018 6:41 pm

Hah, that is one of my hot topics, thank you for posting it.
To be short, EK has a splendid future ahead inho & with many red carpets to virtually anywhere.
I have 4 points of interest.

1. My main concern, nay, my main interest now is to see how they adapt should Airbus fold the A380 programme, which would actually be EK's doing indirectly as many here have concurred : first by opposing a smashing competition against traditional legacies from both the EU & Asia & thus smothering any top-orders from them in a market they cannot compete anymore, secondly by inconsiderately pressing Airbus to low prices, guaranties of all sorts & now unrealistic guarantees to maintain the line open for the next decade so as to externalize the risk to lessors who would otherwise augment leases significantly for any new frames order.

2. The recent EK-G9 shows very promissing in this respect.
I wonder what the whole Emirates Group plans with it in the grand scheme of things.
It is to squeeze their other neighbour LCC F9, which is doing very well apparently as a group of its own ?

3. How they will fare against competition.Their immediate competitors are :
QR will do fine
EY is a regional nonsense within a same country with a me-too product - which I personally prefer though : see py profile pic.
SV is having greater ambitions, perhaps the bigger competition threat
TK ( not a ME3 ) will develop & order more WB, also a big threat
IR has the legitimacy to be a regional connector, but that remains to materialize
WY could become much bigger but have no official intentions so far.

4. Last, I wonder how EK plans to achieve its development, first within DXB, then when finally moving to DWC - if ever.
 
JamesCousins
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Re: The Future of EK

Fri Jan 05, 2018 6:48 pm

erikgrinsvall wrote:
A lot of questions remain at high interest after EK's turbulent time over the past months. High employee resignation rate, uprising loss of possession in AUS market, B787-10 order (somewhat too late) and dying flame in the future of the A380. What are we to expect from the legacy over the next upcoming years?

/E


I think EK will continue to do well financially in my opinion, I see a focus on smaller WB's for routes with slightly less demand, unlike some I don't see this to be alarming at all, EK have simply taken advantage of the routes they can with 380/77W demand. The hub model with connecting traffic can only improve with more feeder routes, and thus more traffic.

Their geographic location paired with their very good hard product and customer service should continue to serve them well, I agree with an above poster that ULCC's undercutting them could be their largest challenge, but surely that's the greatest modern challenge for all carriers, what with the likes of Air Asia and Norweigen's long haul divisions.
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erikgrinsvall
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Re: The Future of EK

Fri Jan 05, 2018 6:52 pm

ER757 wrote:
Why do you say the the 787-10 order was too late?:


Would it have made a difference if they would have kept themselves to the initial A359 order?
 
Swadian
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Re: The Future of EK

Fri Jan 05, 2018 7:02 pm

I'd say QR is doing well enough considering political tensions. EY, on the other hand, seems to be a self-made disaster.
 
aeropix
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Re: The Future of EK

Fri Jan 05, 2018 7:11 pm

I think for sure Delta Air Lines will kill them off eventually, and reclaim all those myriad of overlapping routes and markets that Delta say Emirates has stolen from them through unfair subsidies and price dumping all these years.
 
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NickolayAv
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Re: The Future of EK

Fri Jan 05, 2018 7:24 pm

DJ's Aviation on YouTube made a great video about the future of Emirates.
"If you want to be a millionaire, start with a billion dollars and launch a new airline"-Richard Branson
 
dtw2hyd
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Re: The Future of EK

Fri Jan 05, 2018 7:44 pm

I think you pretty much summarized well.

It has a lot of planes, mostly wrong ones.
It has bloated workforce yet short on core staff.
It claims to be best in its class, yet nickel and dimes passengers.

Headwinds
Oil economies are faltering
LHLCCs are thriving
USA - Protectionism and immigration policies
UK - BREXIT
China - China 6
India - BASA cap
Australia - 2Qs (Qantas and Qatar)
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klm617
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Re: The Future of EK

Fri Jan 05, 2018 8:34 pm

aeropix wrote:
I think for sure Delta Air Lines will kill them off eventually, and reclaim all those myriad of overlapping routes and markets that Delta say Emirates has stolen from them through unfair subsidies and price dumping all these years.


LOL what routes are those ATL-Bangalore. Delta doesn't want that traffic they just want to make noise about it that's all.
the truth does matter, guys. too bad it's often quite subjective. the truth is beyond the mere facts and figures. it's beyond good and bad, right and wrong...
 
airzona11
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Re: The Future of EK

Fri Jan 05, 2018 8:52 pm

EK has critical mass and economies of scale at their only hub. They rarely do not have a CASM advantage. All 3 classes are well received by the people buying the seats. Others in the region and greater region are trying to copy them. FlyDubai gives them more flexibility. They carry lots of cargo. I don't know if EK faces threats that are unique, just the typical ones all airlines face.

7810 is on deck, for those shorter routes or routes where 77W is overkill, there is not a more efficient plane than the 7810.

EK is a well-run airline, has been and looks to continue that trend.
 
blink182
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Re: The Future of EK

Fri Jan 05, 2018 9:02 pm

JamesCousins wrote:
erikgrinsvall wrote:
A lot of questions remain at high interest after EK's turbulent time over the past months. High employee resignation rate, uprising loss of possession in AUS market, B787-10 order (somewhat too late) and dying flame in the future of the A380. What are we to expect from the legacy over the next upcoming years?

/E


I think EK will continue to do well financially in my opinion, I see a focus on smaller WB's for routes with slightly less demand, unlike some I don't see this to be alarming at all, EK have simply taken advantage of the routes they can with 380/77W demand. The hub model with connecting traffic can only improve with more feeder routes, and thus more traffic.

Their geographic location paired with their very good hard product and customer service should continue to serve them well, I agree with an above poster that ULCC's undercutting them could be their largest challenge, but surely that's the greatest modern challenge for all carriers, what with the likes of Air Asia and Norweigen's long haul divisions.


To Tim Clarke's credit, he's openly addressed some of this by putting prices on everything, including lounge access and toying with the idea of launching a discounted C, where the pax just gets a C class seat with none of the meals or lounge access. Heck, they're even charging for rear Y seats on the 777s offer more room because the fuselage tapers; in many ways they're acting like a ULCC but with a strong IFE, meals, and premium cabins. For all the complaints about EK's C product, it's still light years ahead of DY's premium Y. Ultimately, I think the FZ formalization will work wonders for them if they can use that fleet to build up Africa and become an even more legit contender between Asia/Europe and Africa.

The challenge, IMO, isn't from QR or EY, but from the Chinese carriers and TK's wise use of narrowbodies to make routes work that won't support a widebody.

Will EK continue to be a bastion for luxury? Probably not, but I don't think it's been that kind of airline for at least a decade. They're a global, still aspirational brand, however, that everyone knows and is still attracted to, partly for the luster, but also because they fly a lot of flights to a lot of places that a lot of airlines in the US,Asia, and Europe don't serve. In many respects, they've already adapted LCC elements of service without appearing outwardly cheap or tarnishing the brand.
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Re: The Future of EK

Fri Jan 05, 2018 9:29 pm

By AUS I assume you mean Australian and not Austin. Far too much has been read into Qantas’ recent moves. Both carriers have made it clear that the partnership is still vitally important. Qantas’ strategy is pretty clear: re-enter some high yield destinations (basically LHR, I’ll believe they’ll serve FRA or CDG when the first flight touches down), and continue to leverage Emirates’ network to other markets. Qantas continues to push hundreds/thousands of passengers per day through Dubai on EK metal.
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ElroyJetson
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Re: The Future of EK

Fri Jan 05, 2018 9:37 pm

EK is one of the world's premier airlines. They are doing just fine.
 
dtw2hyd
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Re: The Future of EK

Fri Jan 05, 2018 9:43 pm

RyanairGuru wrote:
By AUS I assume you mean Australian and not Austin. Far too much has been read into Qantas’ recent moves. Both carriers have made it clear that the partnership is still vitally important. Qantas’ strategy is pretty clear: re-enter some high yield destinations (basically LHR, I’ll believe they’ll serve FRA or CDG when the first flight touches down), and continue to leverage Emirates’ network to other markets. Qantas continues to push hundreds/thousands of passengers per day through Dubai on EK metal.


While Qantas planning to retake high yield routes in future, hasn't Qatar started dumping capacity and it has better premium product/service.
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PerfectGriffin
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Re: The Future of EK

Fri Jan 05, 2018 11:18 pm

EK seems to be very well run. Lots of rumors get spread about them but somehow it appears like they manage their problems just fine. They are making plenty of changes usually before their competition does anything.

I agree that they ordered the B787-10 too late but then their congested hub really doesn't have any room left. If you look at the A350 order they cancelled, first deliveries of those aircraft weren't expected until 2021, so it appears they are in no rush for receiving the B787s either.

If the A380 production ends, EK can still keep their current A380's longer than planned. That gives them plenty of time to find replacements for those aircraft.

Reduction in services from Australia to NZ isn't good news, but they ultimately found it more important to keep QF's business heading to Europe rather than operate flights to NZ.

One area that EK is missing out on, and has for many years, is the introduction of premium economy. This is a big market than many of the competitors have introduced and are benefiting from.
 
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qf789
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Re: The Future of EK

Sat Jan 06, 2018 2:13 am

dtw2hyd wrote:
RyanairGuru wrote:
By AUS I assume you mean Australian and not Austin. Far too much has been read into Qantas’ recent moves. Both carriers have made it clear that the partnership is still vitally important. Qantas’ strategy is pretty clear: re-enter some high yield destinations (basically LHR, I’ll believe they’ll serve FRA or CDG when the first flight touches down), and continue to leverage Emirates’ network to other markets. Qantas continues to push hundreds/thousands of passengers per day through Dubai on EK metal.


While Qantas planning to retake high yield routes in future, hasn't Qatar started dumping capacity and it has better premium product/service.


Qatar isn't dumping capacity. SYD, MEL and now PER have been upgraded to A388's due to the Aus/Qatar bilateral. Under the bilateral Qatar is only allowed 21 frequencies per week to the 4 main gateways that being PER,MEL,SYD & BNE. On top of that they allowed another they are allowed to operate another 7 frequencies to one of the 4 main gateways via or beyond another airport that is not one of the 4 main gateways, hence the DOH-SYD-CBR route starting next month. The only way QR can increase their market share is by flying larger planes. Compare to this to the UAE carriers they are allowed 142 frequencies per week

As RyanairGuru says the QF/EK partnership is still vitally important for both carriers. For example the PER-Europe market, 30% of the traffic is PER-LHR the remainder 70% is to the rest of Europe. The QF/EK partnership allows for those travelling to other places onto EK services. Far too much has been read into QF moving from a DXB stopover to SIN. From an operational point of view its far better, if an aircraft goes tech at least QF can put passengers on other services to/from Australia and if an aircraft needs to be positioned for passengers it is far closer.
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716131
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Re: The Future of EK

Sat Jan 06, 2018 7:12 am

Any guess what alliance are they joining soon?
If it's not Boeing, I'm not going!
 
Cunard
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Re: The Future of EK

Sat Jan 06, 2018 7:42 am

I don't think we're ever see Emirates joining any alliance and why should they there's absolutely no need for them to be joining any of them, Emirates does quite well without having to be part of any alliance plus now that FlyDubai and Emirates are working together the airline is doing ok.
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StudiodeKadent
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Re: The Future of EK

Sat Jan 06, 2018 7:42 am

EK will be fine, but in the future I expect they will have lower yields.

High-yield traffic prefers direct flights. Connecting traffic in general will always be lower yield. EK, as a superconnector, will basically be put into a situation where they serve two markets...

1. the premium traffic from and to Dubai/Abu Dhabi in particular (the new airport will be fine for both markets)
2. non-premium connecting and tourist traffic

As long as market 1 is large enough they'll be totally okay, and this is why Dubai is trying to make itself such a global finance/commerce hub (so there's a lot of premium demand). Market 2 will not necessarily be "an LCC" but it will probably undercut most direct services due to economies of scale.

I think we can expect EK will innovate with creating higher-density premium economy classes, economy plusses, and segmenting the lower segments of the market. Etihad has already started to do so by selling amenities on an a la carte basis. But I think its fair to say the modern generation of airliners (in particular 787-9, A350s and 777-8s) will force connector yields down.
 
dtw2hyd
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Re: The Future of EK

Sat Jan 06, 2018 1:39 pm

qf789 wrote:
Qatar isn't dumping capacity. SYD, MEL and now PER have been upgraded to A388's due to the Aus/Qatar bilateral. Under the bilateral Qatar is only allowed 21 frequencies per week to the 4 main gateways that being PER,MEL,SYD & BNE. On top of that they allowed another they are allowed to operate another 7 frequencies to one of the 4 main gateways via or beyond another airport that is not one of the 4 main gateways, hence the DOH-SYD-CBR route starting next month. The only way QR can increase their market share is by flying larger planes. Compare to this to the UAE carriers they are allowed 142 frequencies per week

As RyanairGuru says the QF/EK partnership is still vitally important for both carriers. For example the PER-Europe market, 30% of the traffic is PER-LHR the remainder 70% is to the rest of Europe. The QF/EK partnership allows for those travelling to other places onto EK services. Far too much has been read into QF moving from a DXB stopover to SIN. From an operational point of view its far better, if an aircraft goes tech at least QF can put passengers on other services to/from Australia and if an aircraft needs to be positioned for passengers it is far closer.


Dumping may not be the right term, but QR is deploying the bulk of its A388s in one market. Why the emphasis on Australian market? In my opinion, it is playing spoiler in the one market EK still has good loads and yields, probably as a payback for recent sanctions.

Combine this with a redefined relationship with Qantas, is not good for EK.
All posts are just opinions.
 
parapente
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Re: The Future of EK

Sat Jan 06, 2018 5:16 pm

I guess 'the future of EK' must be about airport capacity long term.
In fact I am not quite sure how they intend to fit in what they have already ordered (unless the 777x order is reduced - which there are no signs of).Does anybody know?
777x's yes they are at present a straight one for one swap.
380's are maxed out at about 100.In fact I think they said this themselves a while back.
So how do you fit in a boat load of 7810's?No space,no slots -yet there must be somewhere somehow.
Perhaps they can kick some other operator out into the 'new' airport-which seems to be stuck at one runway ?
 
JamesCousins
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Re: The Future of EK

Sat Jan 06, 2018 6:47 pm

parapente wrote:
I guess 'the future of EK' must be about airport capacity long term.
In fact I am not quite sure how they intend to fit in what they have already ordered (unless the 777x order is reduced - which there are no signs of).Does anybody know?
777x's yes they are at present a straight one for one swap.
380's are maxed out at about 100.In fact I think they said this themselves a while back.
So how do you fit in a boat load of 7810's?No space,no slots -yet there must be somewhere somehow.
Perhaps they can kick some other operator out into the 'new' airport-which seems to be stuck at one runway ?


Add that to the expectation of a further A380 order - Airbus are clearly using the media to leverage negotiating power and so much of EK's business model is so reliant on the 380, from a pax ex, PR and capacity standpoint.

The 787-10s are arriving quite gradually it seems, and not until 2022, although with DWC not due to be finished until the 2027 mark. Could be interesting to see what EK do, they can't really split traffic across the 2 airports, because their business model is so reliant on fast connecting traffic...
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gunnerman
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Re: The Future of EK

Sat Jan 06, 2018 8:20 pm

EK will operate from just one airport, with a planned move to DWC in 2025. In the interim, there will be an effective capacity increase at DXB when flydubai moves 80% of its operation from DXB to DWC in 2018.
 
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RyanairGuru
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Re: The Future of EK

Sat Jan 06, 2018 8:43 pm

dtw2hyd wrote:
qf789 wrote:
Qatar isn't dumping capacity. SYD, MEL and now PER have been upgraded to A388's due to the Aus/Qatar bilateral. Under the bilateral Qatar is only allowed 21 frequencies per week to the 4 main gateways that being PER,MEL,SYD & BNE. On top of that they allowed another they are allowed to operate another 7 frequencies to one of the 4 main gateways via or beyond another airport that is not one of the 4 main gateways, hence the DOH-SYD-CBR route starting next month. The only way QR can increase their market share is by flying larger planes. Compare to this to the UAE carriers they are allowed 142 frequencies per week

As RyanairGuru says the QF/EK partnership is still vitally important for both carriers. For example the PER-Europe market, 30% of the traffic is PER-LHR the remainder 70% is to the rest of Europe. The QF/EK partnership allows for those travelling to other places onto EK services. Far too much has been read into QF moving from a DXB stopover to SIN. From an operational point of view its far better, if an aircraft goes tech at least QF can put passengers on other services to/from Australia and if an aircraft needs to be positioned for passengers it is far closer.


Dumping may not be the right term, but QR is deploying the bulk of its A388s in one market. Why the emphasis on Australian market? In my opinion, it is playing spoiler in the one market EK still has good loads and yields, probably as a payback for recent sanctions.

Combine this with a redefined relationship with Qantas, is not good for EK.


You are completely over thinking it! As pointed out to you already, Qatar is bilateral restricted in Australia. The only way for them to grow is to add larger aircraft. Upgauging three routes in a closed market is simply incremental growth to keep abreast with demand.

Emirates with 14 flights per day will hardly even notice Qatar adding a couple of hundred extra seats. After March they will operate somewhere between 5500 and 6000 seats per day in Australia. They are so dominant in the market, both through the strength of their own brand in Australia and the Qantas partnership, that Qatar couldn’t put a dent in them.
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Dutchy
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Re: The Future of EK

Sat Jan 06, 2018 8:51 pm

frmrCapCadet wrote:
Future 380 orders need to be profitable to Rolls Royce and to EK, and they need to be close to profitable for Airbus. I don't think it is a matter of game playing or media roulette, rather there are 3 companies wanting to make it work, and reality is making it hard.


:checkmark: I think this is right, no negotiations but trying to make it work.
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frmrCapCadet
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Re: The Future of EK

Sat Jan 06, 2018 8:51 pm

Future 380 orders need to be profitable to Rolls Royce and to EK, and they need to be close to profitable for Airbus. I don't think it is a matter of game playing or media roulette, rather there are 3 companies wanting to make it work, and reality is making it hard.
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Planesmart
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Re: The Future of EK

Sat Jan 06, 2018 9:09 pm

frmrCapCadet wrote:
Future 380 orders need to be profitable to Rolls Royce and to EK, and they need to be close to profitable for Airbus. I don't think it is a matter of game playing or media roulette, rather there are 3 companies wanting to make it work, and reality is making it hard.

Four parts in the equation - financiers are the 4th. Willing to fund any aircraft, at a price. It was A amending T&C's, which impacted on financiers, who in turn reflected on EK, that resulted in the hiatus.

When 777X deeply discounted orders are delivered (or expire), interesting to compare finance margins and terms for A380 versus 777X, especially when not for EK. Will the 777X become another 748, requiring Boeing Capital to take the lead?
 
SeaDoo
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Re: The Future of EK

Sun Jan 07, 2018 4:02 am

You are completely over thinking it! As pointed out to you already, Qatar is bilateral restricted in Australia. The only way for them to grow is to add larger aircraft. Upgauging three routes in a closed market is simply incremental growth to keep abreast with demand.

Emirates with 14 flights per day will hardly even notice Qatar adding a couple of hundred extra seats. After March they will operate somewhere between 5500 and 6000 seats per day in Australia. They are so dominant in the market, both through the strength of their own brand in Australia and the Qantas partnership, that Qatar couldn’t put a dent in them.[/quote]

Whats the break down of the 14 flights (i.e. 4 to SYD, 3 to...)?
 
SeaDoo
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Re: The Future of EK

Sun Jan 07, 2018 4:14 am

qf789 wrote:
SeaDoo wrote:
You are completely over thinking it! As pointed out to you already, Qatar is bilateral restricted in Australia. The only way for them to grow is to add larger aircraft. Upgauging three routes in a closed market is simply incremental growth to keep abreast with demand.

Emirates with 14 flights per day will hardly even notice Qatar adding a couple of hundred extra seats. After March they will operate somewhere between 5500 and 6000 seats per day in Australia. They are so dominant in the market, both through the strength of their own brand in Australia and the Qantas partnership, that Qatar couldn’t put a dent in them.


Whats the break down of the 14 flights (i.e. 4 to SYD, 3 to...)?


Its 13 flights actually

PER-DXB 2 daily
ADL-DXB 1 daily
BNE-DXB 3 daily - 2 non stops, 1 via SIN
SYD-DXB 4 daily - 3 non stops, 1 via BKK
MEL-DXB 3 daily - 2 non stops, 1 via SIN[/quote]

Thanks for the information :)
 
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qf789
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Re: The Future of EK

Sun Jan 07, 2018 4:15 am

SeaDoo wrote:
You are completely over thinking it! As pointed out to you already, Qatar is bilateral restricted in Australia. The only way for them to grow is to add larger aircraft. Upgauging three routes in a closed market is simply incremental growth to keep abreast with demand.

Emirates with 14 flights per day will hardly even notice Qatar adding a couple of hundred extra seats. After March they will operate somewhere between 5500 and 6000 seats per day in Australia. They are so dominant in the market, both through the strength of their own brand in Australia and the Qantas partnership, that Qatar couldn’t put a dent in them.


Whats the break down of the 14 flights (i.e. 4 to SYD, 3 to...)?[/quote]

Its 13 flights actually

PER-DXB 2 daily
ADL-DXB 1 daily
BNE-DXB 3 daily - 2 non stops, 1 via SIN
SYD-DXB 4 daily - 3 non stops, 1 via BKK
MEL-DXB 3 daily - 2 non stops, 1 via SIN
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Aither
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Re: The Future of EK

Sun Jan 07, 2018 5:09 am

StudiodeKadent wrote:
EK will be fine, but in the future I expect they will have lower yields.

High-yield traffic prefers direct flights. Connecting traffic in general will always be lower yield. EK, as a superconnector, will basically be put into a situation where they serve two markets...

1. the premium traffic from and to Dubai/Abu Dhabi in particular (the new airport will be fine for both markets)
2. non-premium connecting and tourist traffic
.


Everybody prefer non stop flights when they are available. But there is a growing trend in corporate travel to choose one stop routes with short transit times when the price is lower. Even the banking sector now pays attention to this.
Never trust the obvious
 
dlphoenix
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Re: The Future of EK

Sun Jan 07, 2018 9:48 am

StudiodeKadent wrote:
EK will be fine, but in the future I expect they will have lower yields.

High-yield traffic prefers direct flights. Connecting traffic in general will always be lower yield. EK, as a superconnector, will basically be put into a situation where they serve two markets...

1. the premium traffic from and to Dubai/Abu Dhabi in particular (the new airport will be fine for both markets)
2. non-premium connecting and tourist traffic

As long as market 1 is large enough they'll be totally okay, and this is why Dubai is trying to make itself such a global finance/commerce hub (so there's a lot of premium demand). Market 2 will not necessarily be "an LCC" but it will probably undercut most direct services due to economies of scale.

I think we can expect EK will innovate with creating higher-density premium economy classes, economy plusses, and segmenting the lower segments of the market. Etihad has already started to do so by selling amenities on an a la carte basis. But I think its fair to say the modern generation of airliners (in particular 787-9, A350s and 777-8s) will force connector yields down.


EK provides the most premium option for the following markets:
> US - India (Except NYC/SFO to DEL and NYC to BOM)
> US - China secondary cities (You can also include cities in the US with EK service but without direct service to PEK,PVG and HKG)
> UK (Except the LHR catchment area) - to Australia, China, India and Southwest Asia
> Any city pair from Europe to Asia / Africa/ Australia without a direct connection

I rate premium by:
> Number of connections
> Availability of a premium hard product throughout the flight (Euro-business does not qualify as one)
> Frequency and IRROPS recovery options
> Connection time

Bottom line: EK has a lot of upside for premium travelers
 
dlphoenix
Posts: 127
Joined: Thu Aug 09, 2007 7:30 am

Re: The Future of EK

Sun Jan 07, 2018 9:59 am

IMHO EK's main challenge will be their capital expenses /depreciation / lease costs.
Their current business model assumes lessors will be able to place 12 year old frames with Secondary carriers. I expect lessors / financiers to factor in the risks and challenges of the second hand market resulting with higher costs (Vs legacy carriers who plan to use frames throughout their useful lifetime).

Just my 2 cents
DLP
 
WDHFlyBoy
Posts: 16
Joined: Fri Aug 12, 2016 5:02 am

Re: The Future of EK

Sun Jan 07, 2018 10:16 am

gunnerman wrote:
EK will operate from just one airport, with a planned move to DWC in 2025. In the interim, there will be an effective capacity increase at DXB when flydubai moves 80% of its operation from DXB to DWC in 2018.


This is not going to happen. FZ and EK are looking to further expand their partnership and cooperation. The move to DWC has been delayed indefinitely.
 
Kashmon
Posts: 642
Joined: Thu Dec 04, 2014 8:08 am

Re: The Future of EK

Sun Jan 07, 2018 10:35 am

dlphoenix wrote:
StudiodeKadent wrote:
EK will be fine, but in the future I expect they will have lower yields.

High-yield traffic prefers direct flights. Connecting traffic in general will always be lower yield. EK, as a superconnector, will basically be put into a situation where they serve two markets...

1. the premium traffic from and to Dubai/Abu Dhabi in particular (the new airport will be fine for both markets)
2. non-premium connecting and tourist traffic

As long as market 1 is large enough they'll be totally okay, and this is why Dubai is trying to make itself such a global finance/commerce hub (so there's a lot of premium demand). Market 2 will not necessarily be "an LCC" but it will probably undercut most direct services due to economies of scale.

I think we can expect EK will innovate with creating higher-density premium economy classes, economy plusses, and segmenting the lower segments of the market. Etihad has already started to do so by selling amenities on an a la carte basis. But I think its fair to say the modern generation of airliners (in particular 787-9, A350s and 777-8s) will force connector yields down.


EK provides the most premium option for the following markets:
> US - India (Except NYC/SFO to DEL and NYC to BOM)
> US - China secondary cities (You can also include cities in the US with EK service but without direct service to PEK,PVG and HKG)
> UK (Except the LHR catchment area) - to Australia, China, India and Southwest Asia
> Any city pair from Europe to Asia / Africa/ Australia without a direct connection

I rate premium by:
> Number of connections
> Availability of a premium hard product throughout the flight (Euro-business does not qualify as one)
> Frequency and IRROPS recovery options
> Connection time

Bottom line: EK has a lot of upside for premium travelers


CX and SQ disagree with your points on US-INDIA/CHINA
CX has the fastest connections to the West Coast
both CX and SQ have superior cabins in J especially compared to EK who still does not have direct aisle access on 777
 
T54A
Posts: 336
Joined: Mon Oct 19, 2015 11:47 am

Re: The Future of EK

Sun Jan 07, 2018 12:21 pm

aeropix wrote:
I think for sure Delta Air Lines will kill them off eventually, and reclaim all those myriad of overlapping routes and markets that Delta say Emirates has stolen from them through unfair subsidies and price dumping all these years.


Delta is a US airline and positions itself as such. Emirates is world airline, and the rest of the world see's it as such. No one in Africa, Asia, Europe, South America or Australasia gives a hoot about Delta's gripe with Emirates.
T6, Allouette 3, Oryx, King Air, B1900, B727, B744, A319, A342/3/6 A332/3 A359
 
dtw2hyd
Posts: 8906
Joined: Wed Jan 09, 2013 12:11 pm

Re: The Future of EK

Sun Jan 07, 2018 12:53 pm

Planesmart wrote:
...

When 777X deeply discounted orders are delivered (or expire), interesting to compare finance margins and terms for A380 versus 777X, especially when not for EK. Will the 777X become another 748, requiring Boeing Capital to take the lead?


At best you will not get any response on a.net. At worst both EK and Boeing camps may jump on you for contemplating such scenario.

Majority a.net opinion: 777X demands a premium price. It will sell 1000s of copies. STC is a miracle worker. EK's growth will never slow down. Global financiers will line up at EKHQ to sign lease/finance agreements. Hence 777X and Boeing will piggyback on EK's success.

My opinion: The premium price 777X may demand(over 77W) and the copies(150-500) 777X may sell doesn't justify the project cost for Boeing. Hence it is a risk for Boeing.
All posts are just opinions.
 
ltbewr
Posts: 15614
Joined: Thu Jan 29, 2004 1:24 pm

Re: The Future of EK

Sun Jan 07, 2018 1:17 pm

To me what may be happening with EK is a plateauing of their growth and ability to grow much further as fast. As others have noted, competition in particular from Asian based airlines with low labor costs, the relatively low prices for oil, overcapacity from their mix of aircraft (including the A380 on some routes at times of the year/week), the potential slowing of the world's economy, are all factors to be considered in their ability to grow as had in the past.
 
User avatar
PerfectGriffin
Posts: 541
Joined: Thu Jun 16, 2016 7:35 am

Re: The Future of EK

Sun Jan 07, 2018 1:33 pm

WDHFlyBoy wrote:
gunnerman wrote:
EK will operate from just one airport, with a planned move to DWC in 2025. In the interim, there will be an effective capacity increase at DXB when flydubai moves 80% of its operation from DXB to DWC in 2018.


This is not going to happen. FZ and EK are looking to further expand their partnership and cooperation. The move to DWC has been delayed indefinitely.


Landing slots is a major problem at DXB, but EK and FZ do not cooperate on all destinations so perhaps they will move the non-code share FZ flights to DWC.

The move has not been delayed.Tim Clark repeated at the Dubai Airshow that EK will move to DWC in the middle of the next decade.

DXB's terminals have a max capacity of 90 million passengers but further improvements has increased this to 118 m - they have enough capacity at the terminals until 2023 (according to the DXB CEO).
 
User avatar
Jayafe
Posts: 1228
Joined: Mon Jun 26, 2017 3:12 pm

Re: The Future of EK

Sun Jan 07, 2018 2:08 pm

dtw2hyd wrote:
Majority a.net opinion: 777X demands a premium price. It will sell 1000s of copies.
My opinion: The premium price 777X may demand(over 77W) and the copies(150-500) 777X may sell doesn't justify the project cost for Boeing. Hence it is a risk for Boeing.


Majority? :lol: :lol: :lol:
 
dtw2hyd
Posts: 8906
Joined: Wed Jan 09, 2013 12:11 pm

Re: The Future of EK

Sun Jan 07, 2018 2:21 pm

Jayafe wrote:
dtw2hyd wrote:
Majority a.net opinion: 777X demands a premium price. It will sell 1000s of copies.
My opinion: The premium price 777X may demand(over 77W) and the copies(150-500) 777X may sell doesn't justify the project cost for Boeing. Hence it is a risk for Boeing.


Majority? :lol: :lol: :lol:


This discussion is 5 years old. Your a.net id is 6 months old. Longtime lurker or Alt-ID??
All posts are just opinions.
 
User avatar
aemoreira1981
Posts: 3782
Joined: Mon Jan 09, 2017 12:17 am

Re: The Future of EK

Sun Jan 07, 2018 2:37 pm

The closer cooperation with FlyDubai and their order for larger planes including the 737 MAX 10...I see Emirates becoming the longer-haul brand (or for markets needing planes larger than the 737-10 or where the 737 MAX 10 or MAX 8 doesn't have the range). I see a right-sizing of operations ocurring, including where Emirates shifts to a model with longer-term ownership of aircraft. (IMO, Emirates should shift some of the B78J order down to B789s.) The ideal fleet matrix for EK including FZ would be:

B38M (737 MAX 8)
B3JM (737 MAX 10)
B789 (for thinner long-haul flying)
B78J (for busier regional flying around Asia and Europe)
B77W (for larger loads where the B78J doesn't have the range)
A388 (for the largest loads or to slot-restricted airports)

I can see EK reducing to primarily 3- or 4-class A388s. Also, there should be a true W product on the wide-bodies. BA and AF could be interested in secondhand A380s that were leased by EK under sale-leasebacks.
 
gunnerman
Posts: 1192
Joined: Fri May 19, 2017 7:55 pm

Re: The Future of EK

Sun Jan 07, 2018 3:23 pm

I don't see IAG/BA being interested in former EK A380s as they come with GP7000s, but Trent 900-powered ones would be more interesting.
 
frmrCapCadet
Posts: 4742
Joined: Thu May 29, 2008 8:24 pm

Re: The Future of EK

Sun Jan 07, 2018 4:12 pm

About five years ago EK had the best options for India, east Africa, and Australia here on the west coast. Never China. EK lost its dominance in the last few years, which is not to say that it is not a formidable competitor.
Buffet: the airline business...has eaten up capital...like..no other (business)
 
Planesmart
Posts: 2891
Joined: Sun Dec 05, 2004 3:18 am

Re: The Future of EK

Sun Jan 07, 2018 7:06 pm

dlphoenix wrote:
IMHO EK's main challenge will be their capital expenses /depreciation / lease costs.
Their current business model assumes lessors will be able to place 12 year old frames with Secondary carriers. I expect lessors / financiers to factor in the risks and challenges of the second hand market resulting with higher costs (Vs legacy carriers who plan to use frames throughout their useful lifetime).

Just my 2 cents
DLP

Their leasors and/or Airbus might make that assumption, but EK doesn't.

EK has a strong interest because it affects future funding, especially for niche models like the A380 and 777X.

Although the funding syndicates are not directly affected (they don't fund the subordinate debt), they won't want the funding opportunities to disappear, or become less attractive.

We need to see the subordinate debt shortfall, after deducting EK's final balloon payment. If the plane is to be scrapped, the leasor will use this to pay down the subordinate debt.

Then we need to deduct scrap value, and any contingent payment from Airbus, which will be discounted for lease extensions, hours, cycles, and whether A380 replaces A380, or another Airbus product, or not.

Final balloon payment formula and T&C's are not disclosed, but............... Making a few assumptions, on some leases, the subordinate debt will be cleared. Extending the lease to 13 years, on the same terms and conditions as the first 12, will probably see the subordinate debt cleared on most of the balance.

The least attractive leases are probably early build aircraft, where EK doesn't want to extend. How many in this category? Perhaps the solution is to extend some of the more recent leases to 14 years. That will assist overall A380 funding issues, now and in the future. But leases are not all mirror images, or from the same leasor, and the composition within are different. Great diplomacy required.
 
vadodara
Posts: 1146
Joined: Mon Feb 20, 2017 7:45 pm

Re: The Future of EK

Sun Jan 07, 2018 9:30 pm

Aither wrote:
Considering the regions around EK are the most populous and fastest growing ones in the world + Etihad & Qatar not going so well, I think it's quite reasonable to think that EK still has a lot of potential to grow, in particular with the new airport.

787-10 serving smaller markets & schedule alignments with Flydubai will further boost the feed for the 77X & A380s. The "snowball" effect will continue, unfortunately for other airlines... that's why It's hard to imagine EK without the A380.


Yep! The rulers of Abu Dhabi turned-off the tap's and now EY will need to figure out how to right-size itself. QR has enough problems with its regional politics for some time.

This leaves EK plenty of room to thrive. The Trump threat has come and gone. The A380's will continue to be the most efficient way to funnel passengers to N. America. It is true that some US airports were downsized but with EY pulling out, EK can turn-around and add capacity by upgauging back to A380.

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