Revelation wrote:Timings & deadlines are crucial
Some here are saying the fact that the DWC build out did not track to plan is what has limited EK, i.e. with DWC EK could have scheduled more FZ flights and transferred more pax to EK long haul and vice versa, thus filling more A380s, thus perhaps justifying A380neo, thus undermining regional competitors, etc.
I guess we will never know "what if" DWC was built on a schedule to match EK's growth plans, or why the Emir didn't shift more money towards completing this vital project rather than building palm shaped islands in the Gulf, or if the original plans ever were achievable.
, any delays & whole strategies can go belly up.
As Chaos Theory
teaches, with time paths greatly diverge from original conditions
. Two cases spring to mind :
1) The delays on the A380 cost Airbus not only orders, but also momentum. The initial strategy was sound, Airbus had carried the largest market research ever. With years of delays, the A380F was cancelled, giving the 777F & 748F more market, while the ill-fated 787 got a few years to play catch up, now produced at 150 frames a year which is a feat in itself that also contributed to Boeing's case at the expense of Airbus.
2) It was discussed here that the delays at Berlin is what ruined AirBelin's grand plans, they expanded but could not use their new frames as efficiently as planned. With 10 years delay, that is enough to change a business case.
That is now, but in the US3 have gone through chapter 11, etc. Also groups cannot give an accurate picture, I am fairly sure Dnata is more profitable than EK as an airline, but some companies cannot do without the synergies of others in the same group ( differential equations
), so one needs more info to have a synoptic view
. Percentages are a very crude indicator good for newspapers, bean counters & the few laymen who play armchair CEOs, corporations are actually run on much more complex sets of maximization equations
, the likes of which no one here seems to have any clue, unless they are engineers & possibly pilots.
I enjoyed your post, but would ask if EK is about macroeconomy, What does it say about the wealth of the Emirati that they could not build the kind of facility EK needed to grow to its full potential?
There is no doubt the Emirati got filthily rich. That they spend as fast or above their means is their problem, and a major problem : Dubai is not a human-friendly environment ( nor is NYC or HKG ), it's all about consumerism & bling bling, that is why there is so much stress & why most people waste their lives earning it.
One Nobel prize in Economics was given to the demonstration that money circulation speed creates wealth
. That is quite a simplistic view to well-being, but it was trendy then & it still works for bean counter logic : compare 100 billions sitting in a bank, or spend them right away with recipients spending them in turn, one gets an idea of the difference between the soviet economy & the present centralized chinese development model, with contrasting results. Now, indiscriminate growth actually does destroy wealth, health, well-being, the environment, the future, with great oppotunity costs. Some economists actually use cancer development patterns to make their point in modelizing unsustainable growths, their conclusions are compelling but not well received, because most decision-makers do not see beyond their nose, beyond the bottom-line & short-term profiteering. To put it mildly, it's beyond their grasp & duck their heads under the sand.
And that is the case of Dubai : on simplistic levels they are doing well, most people still applaud like battery-powered monkeys. From a holistic standpoint however, Dubai are polluting themselves, the whole Gulf is polluted courtesy of the ME3 but also of the refineries. Dubai are also irreversably changing their pristine desert to some industrial skyscrapper forest, which needs very solid foundations given the local geology : if I recall well it's sand & granite below, so Dubai is not to sink the way Venice is, but those very foundations are changing the deeper geological layers forever : that is short-sightedness. Having a ski-resort is the kind of nuts project that draw the sheeple but think of the eskimau : if they had the money & set up a jungle under some glass green-house above the polar circle, that's laughable right ? Well, now Dubai want to air-condition parts of if under a glass dome, thus expanding their carbon imprint - which is criminal, with consequences to the region but also to the World.
Anyway, back to your question, the Emirati will keep spending because they have nothing else to keep creating "value" from, it's that "bicycle theory" for shallow development : "keep cycling or fall". Anyone in his right mind who values his Life more than money will not live in Dubai : what is there ? Nothing.
As a tourist, I enjoyed it immensely, no need to go back. Speaking of crazy frenzy Dutyfree sweetspots, Singapore & Hongkong are lightspeed more fun, sophisticated. Bangkok, Hanoi, Shanghai & Tokyo are paradises in comparison.
Did they let their ambition to build a great facility overwhelm their ability to build a good facility?
Or was DWC the right facility, but just not funded on a time line to match EK's needs?
I assume these people are rational by their standards & that their economic forecasts sound at the beginning.
So one would have to assume they met with unforeseen glitches, or perhaps they just overspent, with the consequences discussed earlier. Either way, they made mistakes, DWC is now a huge sunk cost with a loss of credibility that all point to the shallow development ideals I mentionned. While I admire what the EK group has achieved, the whole Stack of Card Dubai has become is the model not to follow imho. But one needs to encompass the other social sciences to understand it.
Last edited by DWC
on Mon Sep 02, 2019 3:45 pm, edited 2 times in total.