WPvsMW
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ULH and overflight of UAE and Qatar

Sat Mar 31, 2018 1:55 am

BOM & DEL <-> LHR are the top three airports, by traffic, for EK and EY, and therefore for the DXB and AUH scissor hubs. The impact of the regional blockage affecting DOH and QR don't allow a fair comparison, thus the focus on EK and EY, but the same analysis would apply to DOH and QR.

It appears that two new dynamics are impacting the previous continuous growth
http://www.aci.aero/Data-Centre/Annual- ... al-summary,
of the Middle East's 6th Freedom strategy: ULH overflights and changes in India.
https://economictimes.indiatimes.com/in ... 135287.cms
http://www.arabianbusiness.com/transpor ... n-february
http://www.dubaiairports.ae/corporate/m ... i-airports

No 2017 final data yet at the free statistics websites, but the recent trend is "flat or negative growth" at DXB and AUH. QF's new PER/LHR nonstop is a harbinger of more AU to EU, and IN to EU, nonstops.

Are we seeing the inflection point in 6th Freedom traffic at DXB and AUH?
 
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neomax
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Re: ULH and overflight of UAE and Qatar

Sat Mar 31, 2018 2:49 am

WPvsMW wrote:
Are we seeing the inflection point in 6th Freedom traffic at DXB and AUH?


No.
 
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LAX772LR
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Re: ULH and overflight of UAE and Qatar

Sat Mar 31, 2018 5:19 am

WPvsMW wrote:
Are we seeing the inflection point in 6th Freedom traffic at DXB and AUH?

Perhaps someday, but there's nil evidence to suggest that that's today.

A handful of ULH overflights here and there aren't going to endanger hundreds of 77Ws and A380s scissoring traffic together from all corners of the globe. The ME3's location is just too central to significant traffic flows; many of which are still underdeveloped (or completely undeveloped) by local carriers.
I myself, suspect a more prosaic motive... ~Thranduil
 
WPvsMW
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Re: ULH and overflight of UAE and Qatar

Sat Mar 31, 2018 7:30 am

I agree that it is premature to assert that Jan 2018, Year-on-Year, is a major inflection, but
http://www.dubaiairports.ae/corporate/m ... i-airports
is evidence showing Jan. 2018 as the first month in the 8 years covered that both pax and cargo have decreased at DXB, and is the fourth consecutive month of Y-on-Y cargo decreases (that's never happened before, counting +0.4% as a decrease in view of historically strong Novembers).

Whether the trend will last, time will tell... but a plateau is an inflection. My observation is more the "party may be over" than the "party will implode". EK and DXB are too strong for that. EY and AUH, however....? Can't find equivalent free data for EY and AUH. Perhaps a member with a CAPA, OAG, etc., subscription can post such data. What happens to the IN/UAE capacity limits in the bilateral if EY sells its interest in 9W?
https://economictimes.indiatimes.com/in ... 135287.cms
 
lancelot07
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Re: ULH and overflight of UAE and Qatar

Sat Mar 31, 2018 9:09 am

WPvsMW wrote:
Are we seeing the inflection point in 6th Freedom traffic at DXB and AUH?

Yes.
They will become like Anchorage or Shannon. Why connect, when you can go direct? Cargo won't mind, but passengers do.
And they do not have a home market.
 
StudiodeKadent
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Re: ULH and overflight of UAE and Qatar

Sat Mar 31, 2018 9:37 am

LAX772LR wrote:
Perhaps someday, but there's nil evidence to suggest that that's today.

A handful of ULH overflights here and there aren't going to endanger hundreds of 77Ws and A380s scissoring traffic together from all corners of the globe. The ME3's location is just too central to significant traffic flows; many of which are still underdeveloped (or completely undeveloped) by local carriers.


I basically agree with this analysis.

In addition, the jets necessary for direct flights are relatively small (787-9, A350-900, A350-ULR) or potentially somewhat-high-CASM (777-8 may be high-ish CASM relative to its competitors). This, plus the demanding requirements of ULH flights, means ULH will mostly be for premium traffic until we can do ULH with larger platforms... now to be fair we're getting close to this, since some A380 routes are arguably ULH or close to it (DXB - AKL on EK, SYD - DFW on QF), and the A350-1000 will be an exceptionally capable bird too. But the point still basically stands... the higher-capacity, higher-economies-of-scale, lower CASM platforms are larger jets that at present can fall a bit short of ULH.

Plenty of flyers purchase flights on the basis of price moreso than anything. This is actually the majority of the long-haul Economy market. They'll take connections to save money, and large economies of scale allow airlines to offer lower prices. The EK Superconnector model will continue to have a place in global aviation, although I do think its likely that unless DXB and AUH keep increasing their prominence as centers for financial sector operations and high-end tourism, we'll see superconnector yields erode.

Also, the remaining ULH routes on our planet are not between highly-populated or ultra-wealthy places. Australia and New Zealand are well off but relatively sparsely populated so the market isn't massive. I doubt HKG - EZE has a large amount of demand either.

ULH will get bigger but I think it will mostly skim the market rather than eliminate the superhub model.
 
WPvsMW
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Re: ULH and overflight of UAE and Qatar

Sat Mar 31, 2018 10:03 am

I'm not predicting the elimination of the scissor hubs in the UAE and Qatar... just that there is evidence of an inflection in the growth curve. The Feb. 2018 numbers should be posted soon. Although ULH capacity overflying the ME3 hubs will be small... those seat miles will be premium fares. Pax who can pay for ULH nonstop will do so; that will be the major inflection. If AI is sold to a new operator who can escape the banking system in India, I think the major inflection will be coincident with those ex-India ULH operations.
 
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LAX772LR
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Re: ULH and overflight of UAE and Qatar

Sat Mar 31, 2018 7:06 pm

WPvsMW wrote:
If AI is sold to a new operator who can escape the banking system in India, I think the major inflection will be coincident with those ex-India ULH operations.

Even in the wildest best-case scenario, it's not like that would be more than a dozen or so flights.

Where are people going to go ex-India on ULH?
  • Up and down the US/Canadian east coast and west coasts
  • Toss in YYZ, ORD, DFW, IAH.
  • Add maybe a LatAm destination or two.

That's pretty much it. Anything else is already flyable or being flown, sans ULH equipment.

Could sting the ME3 a bit, but it's definitely no silver dagger.
I myself, suspect a more prosaic motive... ~Thranduil
 
WPvsMW
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Re: ULH and overflight of UAE and Qatar

Sat Mar 31, 2018 8:40 pm

I think the sting will cause anaphylactic shock. The ME3 scissor strategy is depends primarily on ex-India traffic, and more specifically on ex-BOM and ex-DEL. Yields on non-LCC ops depend primarily on the forward cabins. The ULH overflights will sharply erode the scissor-hub RASM, ergo, anaphylactic shock. The sting won't kill a resilient (infinitely funded) EK, but it will hurt. The effect on a compromised immune system would be more severe.

The initial destinations ex-India nonstop would be the existing cash-cows for the ME3: LHR, MAN, ... the Empire and EU routes. US and CA routes to follow.

[humor] Could QR and EY be the first successfull large scale scissor-hub LCC operators? [/humor]

D7 at KIX, and TR at TPE, are showing that a scissor hub (or at least focus city) can work for an LCC, but can it work on steroids? Why not... the primary LCC premise is "low fares and agony".
 
WPvsMW
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Re: ULH and overflight of UAE and Qatar

Wed Apr 11, 2018 12:31 am

More evidence to support the growing ME3 traffic slump as a real "ME3 inflection point", maybe THE inflection point. EY ending PER, SGN, and more.
On the heels of ending service to THR, DAL, etc.
https://www.routesonline.com/news/38/ai ... -sep-2018/
https://www.routesonline.com/news/38/ai ... had%20ends

There are more... search "Etihad ends" on routesonline.com.

See also factsonly's traffic data in viewtopic.php?f=3&t=1391191
 
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PerfectGriffin
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Re: ULH and overflight of UAE and Qatar

Wed Apr 11, 2018 1:23 am

There are more destinations in the ME3's network than just BOM and DEL...
Besides, I'm not sure about EY and QR, but EK's India flights have a very sizable amount of O&D traffic. Given the amount of Indian expatriates in the UAE, there will always be a huge amount of demand between the two countries.
 
WPvsMW
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Re: ULH and overflight of UAE and Qatar

Wed Apr 11, 2018 8:30 am

Agreed, but DEL and BOM <-> UK and EU are vitally important to EK (and EY and QR). EK's traffic and tonnage is falling. EY and QR are contracting (for some common, and some different, reasons) as never before.

I think Brexit effects have yet to be felt.
http://www.xinhuanet.com/english/2018-0 ... 036803.htm
https://www.thenational.ae/business/avi ... t-1.712375
https://apex.aero/2018/03/15/how-brexit ... n-industry
 
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neomax
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Re: ULH and overflight of UAE and Qatar

Wed Apr 11, 2018 9:00 am

EK has 100 A380's. India matters, but it is a drop in the bucket for EK. If India were to disappear from the map tomorrow, it would be a headache for EK, but nowhere near the disastrous long-term problem you make it out to be. Let's assume all EK flights to India equal 10 A380's, you still have 90 A380's and a 140+ destinations left which have to be filled. EK is a massive company which you may not have realized, because they fly to a huge number of destinations, which is important as STC has specifically stated that they want to diversify key markets in case there is a downturn in any one of them specifically for the reason you state. As a result, no "one market" is so vital to a company that a downturn in it would mean that it would go under as that is a disaster waiting to happen and no company wants to have all their eggs in one basket, that is just bad business, hence why airlines like QR are investing in a wide variety of businesses during a difficult period to help weather the storm. These airlines are not run by idiots, and India is not going to screw over EK and QR if the market changes. DL and AA don't fly to India at all, so by your logic, they would be losing their shirt, which is clearly not the case. Yes, EK may be closer to India, but they fly as far as AKL and LAX so they have the foresight to realize that the world is a big place full of people that have to go places, and not all of them are Indian.
 
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TheFlyingDisk
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Re: ULH and overflight of UAE and Qatar

Wed Apr 11, 2018 9:11 am

lancelot07 wrote:
WPvsMW wrote:
Are we seeing the inflection point in 6th Freedom traffic at DXB and AUH?

Yes.
They will become like Anchorage or Shannon. Why connect, when you can go direct? Cargo won't mind, but passengers do.
And they do not have a home market.


Price sensitive passengers will mind.
I FLY KLM+ALASKA+QATAR+MALAYSIA+AIRASIA+MALINDO
 
WPvsMW
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Re: ULH and overflight of UAE and Qatar

Wed Apr 11, 2018 10:37 pm

True, price sensitive traffic will tolerate not only onestops, but twostops, overnight layovers, etc. (depending on price sensitivity... you can get an incredibly low priced ticket for taking commuter trains the length of Japan rather than taking Shinkansen). HOWEVER, business traffic, and FF alliance traffic, will increasingly be on the nonstops. That shift in traffic has a huge impact on RASK.

Re: the ME3's networks. The ME3 have grown substantial networks... each with a single point of vulnerability: the scissor hub. P2P ULH attacks that vulnerability, and the ME3's only option is to lower F, C, and Y+ fares. The ME3 networks are already shrinking, with yields to follow. The ME3 have the best management money can buy, but cannot avoid an obsolescent (not obsolete) network model.

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