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Fuling
Posts: 276
Joined: Sun Apr 10, 2011 4:41 am

Re: EK's possible future?

Sun May 03, 2020 2:11 am

VSMUT wrote:
Emirates is a state owned flag carrier


Just a minor correction, Etihad is the flag carrier of the UAE, not Emirates.
 
VSMUT
Posts: 4229
Joined: Mon Aug 08, 2016 11:40 am

Re: EK's possible future?

Sun May 03, 2020 5:07 am

Fuling wrote:
VSMUT wrote:
Emirates is a state owned flag carrier


Just a minor correction, Etihad is the flag carrier of the UAE, not Emirates.


Emirates is the state owned flag carrier of the Emirate of Dubai.
 
Dirigible
Posts: 5
Joined: Sat Oct 24, 2015 1:53 am

Re: EK's possible future?

Sun May 03, 2020 6:10 am

The Dubai Govt has announced that it will inject funds into Emirates. How they will raise the funds is unclear as the Dubai Emirate itself has a huge debt burden, much of which is due soon.
Last year it deferred repayment of its previous bailout funds funds from the '08 global financial crisis (UAE Central Bank along with National Bank of Abu Dhabi totalling $20bn over a further 5 year term). With Dubai Government Related Entities in debt, and the collapse of the property market, I assume that they must be looking to AUH with its immense sovereign fund wealth for another bailout. Collateral for the '08 funding was the Burj Dubai (part of the terms was renaming it Burj Khalifa). Emirates Airline is the most obvious highly valued asset that Dubai has remaining to put up as collateral (Dubai Ports a far smaller entity), but at what price? There is already deep seated antipathy at the failure of AUH to get a piece of Emirates many years ago, hence the unprofitable EY venture. Could we see a change of ownership, a name change, or an Abu Dhabi nominated President to replace STC? Whatever the terms, it will not come scot free. Interesting times ahead.
 
Fuling
Posts: 276
Joined: Sun Apr 10, 2011 4:41 am

Re: EK's possible future?

Sun May 03, 2020 6:56 am

VSMUT wrote:
Fuling wrote:
VSMUT wrote:
Emirates is a state owned flag carrier


Just a minor correction, Etihad is the flag carrier of the UAE, not Emirates.


Emirates is the state owned flag carrier of the Emirate of Dubai.


Sorry, thought you meant of the UAE.
 
strfyr51
Posts: 4899
Joined: Tue Apr 10, 2012 5:04 pm

Re: EK's possible future?

Sun May 03, 2020 7:28 am

PANAMsterdam wrote:
I see EK as the Pan Am of my time. They are the airline everybody looks up to and compares itself to. The 747 was Pan Am's icon, as is the A380 for Emirates. But just as Pan Am, EK seems to have made the same mistake about their fleet.

Pan Am had a massive problem on its hands in the early 70's when the oil crisis begun: gigantic aircraft with not enough passengers to carry, making their operations severely unprofitable. They had too many 747's on their hands, and too many on order. Pan Am had miscalculated the industry, they thought the industry could/would only grow and never shrink. But the oil crisis swept them off their feet, and many agree that the $530 million order for 25 747's aimed to make Pan Am bigger, was ironically the first nail in their coffin.

Now EK has consolidated its fleet structure around two massive aircraft: The 777 and A380. Which makes sort of sense in good times (given their geographical location), but no sense in lesser times let alone in bad times. EK has plenty of regional destinations that would be served well with a 737/A320 (Iraq / Iran / Saudi Arabia and so on). But now that the the demand has fallen 95%, EK has suddenly the same problem as Pan Am had: gigantic aircraft to fill with not enough passengers. And this low passenger number will likely not recover in the foreseeable future.

Other airlines like QR or KL can (re)start/continue their operations with their narrow body fleet & smaller wide bodies like the A350 or 787 while parking or converting their 777's (for freight). EK can't do that. And the smallest wide body they had, the A330, left the fleet a few years ago. Now EK has realized that, by ordering A350's and 787's but far too late to help them in this corona crisis.

Additional problem for EK is that they are located in a country that lives on and breathes oil. But the unthinkable has happend: the world is suddenly not hungry for oil anymore. So that source of income for Dubai's rulers has (almost literally) dried up and makes it harder to find cash to invest in EK. They will find a way, since the growth of EK and Dubai goes hand in hand, and because Dubai isn't suddenly a poor country. But together they grew, but it seems like together they are falling too.

Always remember: anything is possible even when people are telling you it can't be! The Titanic was unsinkable, the oil price could never be negative, American Airlines would never lose money again.

History proved them all wrong.

Given recent negative experiences here on A.net I would like to state that this is just my opinion. Feel free to agree or disagree with me but please use arguments not attacks or sarcastic commentary. Thank you :pray:

PAN AM's problems were that it had very little domestic feed, and really couldn't feed it's own flights. Up tp De-regulation Pan Am had little of a real domestic network. their fleet was a lot of long range widebodies and a few smaller airplanes. And they were kept domestically weak by the CAB. Once there was no Longer a CAB to reign everybody Else out of international flying? Pan Am wasn't really able to do wjat they needed to do and pretty much self Liquidated. Especiallly after they sold the Pacific division to United for $750M.
 
Toinou
Posts: 257
Joined: Sun Apr 14, 2019 8:21 am

Re: EK's possible future?

Sun May 03, 2020 7:31 am

Gremlinzzzz wrote:
The worldwide economy is going to take years to get back to where it was. My estimation is that the coronavirus situation is going to be followed by a recession because there is too much leverage in the system, and coming off this situation, not enough demand.

In such situations, the airlines with the biggest jets have the biggest problems, but the bigger jets also have the needed range for some of their networks. That said, not all business can be done by teleconferencing; in fact, most business cannot be done in this manner. If you are in the clothing business, you have to travel to ascertain the quality of goods. If you are an art dealer, you have to travel, if you deal precious metals, you have to do the same. If you are dealing agricultural produce, if you design electronics.........most businesses that are not service oriented demand this.
When you are in the service industry, say software, and you state that we are in the new age and you do not want to travel because you can skype or zoom. You will lose most big contracts. If you are an ad agency, travel is part of the business expense, if you are a bank or fund management that is looking to land that huge business, you do not cut corners. This is where I disagree with the new age teleconferencing view seeing that this is something that has been there, yet businesses are averse to using it. Even seminars that can be done online will almost always not be done that way when it comes to science, health or finance, and there are a lot of practical reasons why this is the case.

At current moment, most business that need people to travel are dead. Dead because there is no travel, dead because there is no demand, dead because people are at home. Production will come up as demand comes up, airlines that needed jets, will defer orders until they think they are on solid enough ground. EK will struggle initially, possibly cut some frequencies in the medium term. The other stuff though, is an overreaction.


I never wanted to say that you can do every kind of business without meeting in person. Just that in many fields where it was said to be impossible to work without travel, people suddenly realized in the last months that they can still do quite a lot of business using video-conference. I think that this may well be a lasting legacy of this situation. Will business travel bounce back? Obviously. Will it bounce to the level it was, I wouldn't be surprised if it doesn't.
Besides video-conference, your explanation overlook another aspect: many large companies, in the fields you mention, have global network of subsidiaries or associates that can do many local businesses for them.
You talk about precious metals trade. I know quite well how it works an I can tell you that most people travel very few. The metals do, in very controlled circuits, with a few trusted people making sure that everything is working according to standards. So in this aspect, the need is more about cargo transport. I wouldn't say they same about precious stones. This still drives many people to travel as there is much less trust.
 
strfyr51
Posts: 4899
Joined: Tue Apr 10, 2012 5:04 pm

Re: EK's possible future?

Sun May 03, 2020 7:43 am

strfyr51 wrote:
PANAMsterdam wrote:
I see EK as the Pan Am of my time. They are the airline everybody looks up to and compares itself to. The 747 was Pan Am's icon, as is the A380 for Emirates. But just as Pan Am, EK seems to have made the same mistake about their fleet.

Pan Am had a massive problem on its hands in the early 70's when the oil crisis begun: gigantic aircraft with not enough passengers to carry, making their operations severely unprofitable. They had too many 747's on their hands, and too many on order. Pan Am had miscalculated the industry, they thought the industry could/would only grow and never shrink. But the oil crisis swept them off their feet, and many agree that the $530 million order for 25 747's aimed to make Pan Am bigger, was ironically the first nail in their coffin.

Now EK has consolidated its fleet structure around two massive aircraft: The 777 and A380. Which makes sort of sense in good times (given their geographical location), but no sense in lesser times let alone in bad times. EK has plenty of regional destinations that would be served well with a 737/A320 (Iraq / Iran / Saudi Arabia and so on). But now that the the demand has fallen 95%, EK has suddenly the same problem as Pan Am had: gigantic aircraft to fill with not enough passengers. And this low passenger number will likely not recover in the foreseeable future.

Other airlines like QR or KL can (re)start/continue their operations with their narrow body fleet & smaller wide bodies like the A350 or 787 while parking or converting their 777's (for freight). EK can't do that. And the smallest wide body they had, the A330, left the fleet a few years ago. Now EK has realized that, by ordering A350's and 787's but far too late to help them in this corona crisis.

Additional problem for EK is that they are located in a country that lives on and breathes oil. But the unthinkable has happend: the world is suddenly not hungry for oil anymore. So that source of income for Dubai's rulers has (almost literally) dried up and makes it harder to find cash to invest in EK. They will find a way, since the growth of EK and Dubai goes hand in hand, and because Dubai isn't suddenly a poor country. But together they grew, but it seems like together they are falling too.

Always remember: anything is possible even when people are telling you it can't be! The Titanic was unsinkable, the oil price could never be negative, American Airlines would never lose money again.

History proved them all wrong.

Given recent negative experiences here on A.net I would like to state that this is just my opinion. Feel free to agree or disagree with me but please use arguments not attacks or sarcastic commentary. Thank you :pray:

PAN AM's problems were that it had very little domestic feed, and really couldn't feed it's own flights. Up tp De-regulation Pan Am had little of a real domestic network. their fleet was a lot of long range widebodies and a few smaller airplanes. And they were kept domestically weak by the CAB. Once there was no Longer a CAB to reign everybody Else out of international flying? Pan Am wasn't really able to do wjat they needed to do and pretty much self Liquidated. Especiallly after they sold the Pacific division to United for $750M.

as I see it? For EK to survive they will need to join or form an alliance with carriers in their strongest regions to feed their long haul flights/ Especially in the USA and Far east. In the middle east? they could and should feed themselves with a regional network flying and feeding their Hub. I mean they have all of Africa to look at. and they might do well in an alliance with the carriers in their region of the world all the way down to South Africa, east to Singapore and China . Their catch region is pretty wide though their down look is the size of their airplanes. A 70% load on a 777 isn't 50% of an A380. One would make you money and the other would break even at best .
 
VSMUT
Posts: 4229
Joined: Mon Aug 08, 2016 11:40 am

Re: EK's possible future?

Sun May 03, 2020 8:08 am

strfyr51 wrote:
strfyr51 wrote:
PANAMsterdam wrote:
I see EK as the Pan Am of my time. They are the airline everybody looks up to and compares itself to. The 747 was Pan Am's icon, as is the A380 for Emirates. But just as Pan Am, EK seems to have made the same mistake about their fleet.

Pan Am had a massive problem on its hands in the early 70's when the oil crisis begun: gigantic aircraft with not enough passengers to carry, making their operations severely unprofitable. They had too many 747's on their hands, and too many on order. Pan Am had miscalculated the industry, they thought the industry could/would only grow and never shrink. But the oil crisis swept them off their feet, and many agree that the $530 million order for 25 747's aimed to make Pan Am bigger, was ironically the first nail in their coffin.

Now EK has consolidated its fleet structure around two massive aircraft: The 777 and A380. Which makes sort of sense in good times (given their geographical location), but no sense in lesser times let alone in bad times. EK has plenty of regional destinations that would be served well with a 737/A320 (Iraq / Iran / Saudi Arabia and so on). But now that the the demand has fallen 95%, EK has suddenly the same problem as Pan Am had: gigantic aircraft to fill with not enough passengers. And this low passenger number will likely not recover in the foreseeable future.

Other airlines like QR or KL can (re)start/continue their operations with their narrow body fleet & smaller wide bodies like the A350 or 787 while parking or converting their 777's (for freight). EK can't do that. And the smallest wide body they had, the A330, left the fleet a few years ago. Now EK has realized that, by ordering A350's and 787's but far too late to help them in this corona crisis.

Additional problem for EK is that they are located in a country that lives on and breathes oil. But the unthinkable has happend: the world is suddenly not hungry for oil anymore. So that source of income for Dubai's rulers has (almost literally) dried up and makes it harder to find cash to invest in EK. They will find a way, since the growth of EK and Dubai goes hand in hand, and because Dubai isn't suddenly a poor country. But together they grew, but it seems like together they are falling too.

Always remember: anything is possible even when people are telling you it can't be! The Titanic was unsinkable, the oil price could never be negative, American Airlines would never lose money again.

History proved them all wrong.

Given recent negative experiences here on A.net I would like to state that this is just my opinion. Feel free to agree or disagree with me but please use arguments not attacks or sarcastic commentary. Thank you :pray:

PAN AM's problems were that it had very little domestic feed, and really couldn't feed it's own flights. Up tp De-regulation Pan Am had little of a real domestic network. their fleet was a lot of long range widebodies and a few smaller airplanes. And they were kept domestically weak by the CAB. Once there was no Longer a CAB to reign everybody Else out of international flying? Pan Am wasn't really able to do wjat they needed to do and pretty much self Liquidated. Especiallly after they sold the Pacific division to United for $750M.

as I see it? For EK to survive they will need to join or form an alliance with carriers in their strongest regions to feed their long haul flights/ Especially in the USA and Far east. In the middle east? they could and should feed themselves with a regional network flying and feeding their Hub. I mean they have all of Africa to look at. and they might do well in an alliance with the carriers in their region of the world all the way down to South Africa, east to Singapore and China . Their catch region is pretty wide though their down look is the size of their airplanes. A 70% load on a 777 isn't 50% of an A380. One would make you money and the other would break even at best .


Emirates already has a lot of codeshare agreements.

In Australia they codeshare with Qantas and Jetstar. Across Asia they codeshare with Jetstar, Bangkok Airways and a few others. In Africa they codeshare with South African. In North America they have agreements with Alaska Airlines, Westjet and Jetblue. They also have agreements with COPA and Interjet.

For short haul regional flying they have FlyDubai.

All you points are already adressed by the company.
 
JayinKitsap
Posts: 2161
Joined: Sat Nov 26, 2005 9:55 am

Re: EK's possible future?

Sun May 03, 2020 8:08 am

strfyr51 wrote:
strfyr51 wrote:
PANAMsterdam wrote:
I see EK as the Pan Am of my time. They are the airline everybody looks up to and compares itself to. The 747 was Pan Am's icon, as is the A380 for Emirates. But just as Pan Am, EK seems to have made the same mistake about their fleet.

Pan Am had a massive problem on its hands in the early 70's when the oil crisis begun: gigantic aircraft with not enough passengers to carry, making their operations severely unprofitable. They had too many 747's on their hands, and too many on order. Pan Am had miscalculated the industry, they thought the industry could/would only grow and never shrink. But the oil crisis swept them off their feet, and many agree that the $530 million order for 25 747's aimed to make Pan Am bigger, was ironically the first nail in their coffin.

Now EK has consolidated its fleet structure around two massive aircraft: The 777 and A380. Which makes sort of sense in good times (given their geographical location), but no sense in lesser times let alone in bad times. EK has plenty of regional destinations that would be served well with a 737/A320 (Iraq / Iran / Saudi Arabia and so on). But now that the the demand has fallen 95%, EK has suddenly the same problem as Pan Am had: gigantic aircraft to fill with not enough passengers. And this low passenger number will likely not recover in the foreseeable future.

Other airlines like QR or KL can (re)start/continue their operations with their narrow body fleet & smaller wide bodies like the A350 or 787 while parking or converting their 777's (for freight). EK can't do that. And the smallest wide body they had, the A330, left the fleet a few years ago. Now EK has realized that, by ordering A350's and 787's but far too late to help them in this corona crisis.

Additional problem for EK is that they are located in a country that lives on and breathes oil. But the unthinkable has happend: the world is suddenly not hungry for oil anymore. So that source of income for Dubai's rulers has (almost literally) dried up and makes it harder to find cash to invest in EK. They will find a way, since the growth of EK and Dubai goes hand in hand, and because Dubai isn't suddenly a poor country. But together they grew, but it seems like together they are falling too.

Always remember: anything is possible even when people are telling you it can't be! The Titanic was unsinkable, the oil price could never be negative, American Airlines would never lose money again.

History proved them all wrong.

Given recent negative experiences here on A.net I would like to state that this is just my opinion. Feel free to agree or disagree with me but please use arguments not attacks or sarcastic commentary. Thank you :pray:

PAN AM's problems were that it had very little domestic feed, and really couldn't feed it's own flights. Up tp De-regulation Pan Am had little of a real domestic network. their fleet was a lot of long range widebodies and a few smaller airplanes. And they were kept domestically weak by the CAB. Once there was no Longer a CAB to reign everybody Else out of international flying? Pan Am wasn't really able to do wjat they needed to do and pretty much self Liquidated. Especiallly after they sold the Pacific division to United for $750M.

as I see it? For EK to survive they will need to join or form an alliance with carriers in their strongest regions to feed their long haul flights/ Especially in the USA and Far east. In the middle east? they could and should feed themselves with a regional network flying and feeding their Hub. I mean they have all of Africa to look at. and they might do well in an alliance with the carriers in their region of the world all the way down to South Africa, east to Singapore and China . Their catch region is pretty wide though their down look is the size of their airplanes. A 70% load on a 777 isn't 50% of an A380. One would make you money and the other would break even at best .


I too see it downsizing, about 80% of the current planes, in a decade maybe 40 A380's, about the same 77W/779 quantities as now, and A359 / 789's making 1/3 of the fleet. Most of their network but some fewer frequencies.
 
MartijnNL
Posts: 968
Joined: Sun Jan 01, 2017 11:44 am

Re: EK's possible future?

Sun May 03, 2020 8:08 am

PANAMsterdam wrote:
I see EK as the Pan Am of my time. (...) But the oil crisis swept them off their feet, and many agree that the $530 million order for 25 747's aimed to make Pan Am bigger, was ironically the first nail in their coffin.

That sounds like a really good deal, though.
Were 747's really that cheap back in the day?

PANAMsterdam wrote:
Additional problem for EK is that they are located in a country that lives on and breathes oil.

There is hardly any oil in the country.

PANAMsterdam wrote:
Always remember: anything is possible even when people are telling you it can't be! The Titanic was unsinkable, the oil price could never be negative, American Airlines would never lose money again. History proved them all wrong.

The Titanic only became unsinkable after it sank.
Nobody said it was unsinkable before it happened.

PANAMsterdam wrote:
Given recent negative experiences here on A.net I would like to state that this is just my opinion. Feel free to agree or disagree with me but please use arguments not attacks or sarcastic commentary. Thank you :pray:

Hopefully I am not too negative.
 
myki
Posts: 195
Joined: Wed Sep 05, 2018 6:43 am

Re: EK's possible future?

Sun May 03, 2020 8:20 am

MartijnNL wrote:
PANAMsterdam wrote:
Additional problem for EK is that they are located in a country that lives on and breathes oil.

There is hardly any oil in the country.

I recall reading somewhere (happy to be corrected!) that Abu Dhabi emirate has 20 years of oil left, so yes there is oil left in the country but doesn't mean they need to share the dirhams around with the rest of the country ... and if they do, as has been mentioned, it won't be for free. Dubai emirate emptied out the barrels of oil a while ago now, went bust when building Burj Dubai and had to get Sheikh Khalifa of Abu Dhabi to help out with some spare coins - and a change in building name ;)
 
Toinou
Posts: 257
Joined: Sun Apr 14, 2019 8:21 am

Re: EK's possible future?

Sun May 03, 2020 8:29 am

MartijnNL wrote:
PANAMsterdam wrote:
I see EK as the Pan Am of my time. (...) But the oil crisis swept them off their feet, and many agree that the $530 million order for 25 747's aimed to make Pan Am bigger, was ironically the first nail in their coffin.

That sounds like a really good deal, though.
Were 747's really that cheap back in the day?


In all fairness, it's a 1966 (Is it the right date?) price. According to US inflation statistics, you need to multiply by 8. This gives you a current $4.24bn, which is around $170m per plane. It is far below the current list price which is set around $370m but real prices tend to be far lower.
If someone can provide an estimated market price for a 747, we could have a fair comparison.
 
PANAMsterdam
Posts: 249
Joined: Thu Jun 27, 2019 7:45 am

Re: EK's possible future?

Sun May 03, 2020 10:19 am

MartijnNL wrote:
That sounds like a really good deal, though.
Were 747's really that cheap back in the day?


That $530m price tag is not adjusted to inflation. Airlines were not as rich as they are today of course and it's not only the amount of money but also the number of aircraft. So buying $530m worth of aircraft was at that time enormous.
Pan Am had in 1969 a revenue of $1.045b and a debt of $811m and an operating loss of 25,8 million; at the start of their 747 program!
(very cool source) And also remember: Boeing designed a whole new aircraft at the directions for and wishes from Pan Am! Juan Tripp said "if you build it, i'll buy it".

Delta Air Lines had in 2019 a revenue of 49 billion. That's them ordering 24,5 billion dollars of aircraft. Nowadays that's big but not unheard of, back in the 60's it was a stunningly large order of a stunning new plane.

MartijnNL wrote:
There is hardly any oil in the country.


I'm sorry but I don't understand this point, could you please explain that further? What i read is that 45% of the export of the UAE is crude oil.

MartijnNL wrote:
The Titanic only became unsinkable after it sank. Nobody said it was unsinkable before it happened.


Shipbuilder Harland and Wolff did not claim she was unsinkable, but a promotional item from the White Star Line stressed the safety of Olympic and Titanic, claiming that "as far as it is possible to do so, these two wonderful vessels are designed to be unsinkable".

MartijnNL wrote:
Hopefully I am not too negative.

No you're not. You have valid points and questions. Thank you.
Every country has an airline. The world has Pan Am.
 
JayinKitsap
Posts: 2161
Joined: Sat Nov 26, 2005 9:55 am

Re: EK's possible future?

Sun May 03, 2020 10:55 am

PANAMsterdam wrote:
MartijnNL wrote:
There is hardly any oil in the country.

I'm sorry but I don't understand this point, could you please explain that further? What i read is that 45% of the export of the UAE is crude oil.

From Wiki:
The sovereign constitutional monarchy is a federation of seven emirates consisting of Abu Dhabi (which serves as the capital), Ajman, Dubai, Fujairah, Ras Al Khaimah, Sharjah and Umm Al Quwain. Their boundaries are complex, with numerous enclaves within the various emirates.[9] Each emirate is governed by a ruler; together, they jointly form the Federal Supreme Council. One of the rulers serves as the President of the United Arab Emirates.


https://en.wikipedia.org/wiki/United_Arab_Emirates

Financially, each of the 7 emirates functions as a separate country. The UAE is like a mini EU for them. Dubai has almost no oil, but Abu Dhabi has a lot.
 
dtw2hyd
Posts: 8272
Joined: Wed Jan 09, 2013 12:11 pm

Re: EK's possible future?

Sun May 03, 2020 4:04 pm

None of the conditions Emirates made the world's largest international carrier exists today.

Dubai's family, friends and neighbors don't have easy access to cash like they used to. Repeating Dubai never had oil money is beating the dead horse.

Reality is, UAE, Kuwait and Saudi have very limited disposable income to support neighbor's vanity projects. Dubai itself will not have tourism money also.
International business travel is not going to reach pre-COVID19 levels anytime soon.
International VFR will never reach pre-COVID19 levels.
All the highlights of EK model, like product and service are irrelevant now, every crew-passenger contact point is a risk, very difficult to show personal touch with full PPE.
Passengers will look for fastest travel options, mostly P2P. Not many passengers want to congregate in airport lounges at huge hubs.

On a side note, what are av bloggers going to do, find another real job.
All posts are just opinions.
 
Aither
Posts: 1284
Joined: Mon Oct 25, 2004 3:43 am

Re: EK's possible future?

Sun May 03, 2020 4:22 pm

dtw2hyd wrote:
None of the conditions Emirates made the world's largest international carrier exists today.

Dubai's family, friends and neighbors don't have easy access to cash like they used to. Repeating Dubai never had oil money is beating the dead horse.

Reality is, UAE, Kuwait and Saudi have very limited disposable income to support neighbor's vanity projects. Dubai itself will not have tourism money also.
International business travel is not going to reach pre-COVID19 levels anytime soon.
International VFR will never reach pre-COVID19 levels.
All the highlights of EK model, like product and service are irrelevant now, every crew-passenger contact point is a risk, very difficult to show personal touch with full PPE.
Passengers will look for fastest travel options, mostly P2P. Not many passengers want to congregate in airport lounges at huge hubs.

On a side note, what are av bloggers going to do, find another real job.


I believe the exact opposite of basically everything you say here.

- EK, based on efficiency and a sound business model, will benefit of failing vanity projects.

- EK is more about trade than tourism.

- International travel will recover faster than you think : for one european/american not travelling, you will have 2 Asian/African starting to travel.

- Full PPE and avoiding hubs is a short term thing. The alternative is not point to point it's no aviation anymore. Hubs will benefit from consolidated networks & airlines reducing capacity.

If today I have the choice to travel between Asia and Europe, I would look first at Emirates. Emirates is for me a symbol of efficiency, and as a consequence an airline I trust more than others to do things the right way.

What many are miscalculating is that in many regions where EK is strong people don't travel just for leisure but a lot because the economic situation in their home countries is not good so they need to migrate and rely more on trading, finding new markets. Crisis make people move.
Never trust the obvious
 
dtw2hyd
Posts: 8272
Joined: Wed Jan 09, 2013 12:11 pm

Re: EK's possible future?

Sun May 03, 2020 5:29 pm

Aither wrote:
dtw2hyd wrote:
None of the conditions Emirates made the world's largest international carrier exists today.

Dubai's family, friends and neighbors don't have easy access to cash like they used to. Repeating Dubai never had oil money is beating the dead horse.

Reality is, UAE, Kuwait and Saudi have very limited disposable income to support neighbor's vanity projects. Dubai itself will not have tourism money also.
International business travel is not going to reach pre-COVID19 levels anytime soon.
International VFR will never reach pre-COVID19 levels.
All the highlights of EK model, like product and service are irrelevant now, every crew-passenger contact point is a risk, very difficult to show personal touch with full PPE.
Passengers will look for fastest travel options, mostly P2P. Not many passengers want to congregate in airport lounges at huge hubs.

On a side note, what are av bloggers going to do, find another real job.


I believe the exact opposite of basically everything you say here.

- EK, based on efficiency and a sound business model, will benefit of failing vanity projects.

- EK is more about trade than tourism.

- International travel will recover faster than you think : for one european/american not travelling, you will have 2 Asian/African starting to travel.

- Full PPE and avoiding hubs is a short term thing. The alternative is not point to point it's no aviation anymore. Hubs will benefit from consolidated networks & airlines reducing capacity.

If today I have the choice to travel between Asia and Europe, I would look first at Emirates. Emirates is for me a symbol of efficiency, and as a consequence an airline I trust more than others to do things the right way.

What many are miscalculating is that in many regions where EK is strong people don't travel just for leisure but a lot because the economic situation in their home countries is not good so they need to migrate and rely more on trading, finding new markets. Crisis make people move.


Mostly wishful thinking. EK runs on the premise of free travel, which is history. Asians and Africans to travel where? There has to be enough countries with relatively open borders for EK model to work.

What is the monthly cash burn rate of Emirates? 250 leased planes and 100,000 employees are not free.

Anyone who wants to travel from country A to country B won't seek out cheap tickets or bling, they will try to avoid any third country.

Free market economies quickly pulled out their unpublished socialist playbooks and bailing out billions of dollars/Euros to their own airlines, no one is saying let our airline fail, Emirates is going to operate, may be except India(Air India).
All posts are just opinions.
 
Aither
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Re: EK's possible future?

Sun May 03, 2020 9:44 pm

Well, if your scenario is the end of air travel obviously EK will be in a bad shape...
There is nothing to be discussed about a worst case scenario. It's just the end of everything. The only thing I'm 100% certain is that If you only prepare for the worse then only the worse can happen to you.

Saying "None of the conditions Emirates made the world's largest international carrier exists today." is just ignoring the centre of gravity in the world has changed. And it's not a health or financial crisis that are going to change that. Europe & North America will probably suffer more than anywhere else. This on the contrary, will make EK relatively even more the largest international carrier in the world.
Last edited by Aither on Sun May 03, 2020 10:01 pm, edited 1 time in total.
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Whalejet
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Re: EK's possible future?

Sun May 03, 2020 10:01 pm

COVID-19 is going to result in airlines consolidating hub operations to cut costs. Yes, P2P is slightly better from a public health standpoint - but I am talking about after a vaccine is developed and COVID-19 is eradicated. There are dozens of other things that governments can do to prepare for the next pandemic, ditching airline hubs is pretty low on that list. I haven't heard of any super-spreader events at airports (I don't want to turn this into a big discussion about how pandemics start btw).

With hubs consolidating comes a greater role for Emirates, and I am sure the Dubai government knows this - they will ensure EK survives. When EK comes out, it will be a different world, with many airlines utilizing fewer hubs than before. That is where EK, with its monster planes, can shine. Furthermore, low oil prices help EK's bottom line tremendously. Dubai isn't dependent on oil revenue whatsoever - that's Abu Dhabi's problem, which will weaken Etihad.
 
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scbriml
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Re: EK's possible future?

Sun May 03, 2020 10:42 pm

Aither wrote:
Well, if your scenario is the end of air travel obviously EK will be in a bad shape...


Not to mention every other airline in the World. Some still waiting breathlessly for Emirates to fail.
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acavpics
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Re: EK's possible future?

Sun May 03, 2020 10:55 pm

EK is without doubt the strongest of the gulf carriers. QR has been making losses since the 2017 GCC blockade. EY has been losing money due to pure and utter mismanagement. EK is the only one to have remained in profitability up until COVID-19. They will definitely make it through this and restore a good chunk of their previous operations.
 
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DLHAM
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Re: EK's possible future?

Sun May 03, 2020 11:30 pm

PANAMsterdam wrote:
I see EK as the Pan Am of my time. They are the airline everybody looks up to and compares itself to. The 747 was Pan Am's icon, as is the A380 for Emirates. But just as Pan Am, EK seems to have made the same mistake about their fleet.

Pan Am had a massive problem on its hands in the early 70's when the oil crisis begun: gigantic aircraft with not enough passengers to carry, making their operations severely unprofitable. They had too many 747's on their hands, and too many on order. Pan Am had miscalculated the industry, they thought the industry could/would only grow and never shrink. But the oil crisis swept them off their feet, and many agree that the $530 million order for 25 747's aimed to make Pan Am bigger, was ironically the first nail in their coffin.

Now EK has consolidated its fleet structure around two massive aircraft: The 777 and A380. Which makes sort of sense in good times (given their geographical location), but no sense in lesser times let alone in bad times. EK has plenty of regional destinations that would be served well with a 737/A320 (Iraq / Iran / Saudi Arabia and so on). But now that the the demand has fallen 95%, EK has suddenly the same problem as Pan Am had: gigantic aircraft to fill with not enough passengers. And this low passenger number will likely not recover in the foreseeable future.

Other airlines like QR or KL can (re)start/continue their operations with their narrow body fleet & smaller wide bodies like the A350 or 787 while parking or converting their 777's (for freight). EK can't do that. And the smallest wide body they had, the A330, left the fleet a few years ago. Now EK has realized that, by ordering A350's and 787's but far too late to help them in this corona crisis.

Additional problem for EK is that they are located in a country that lives on and breathes oil. But the unthinkable has happend: the world is suddenly not hungry for oil anymore. So that source of income for Dubai's rulers has (almost literally) dried up and makes it harder to find cash to invest in EK. They will find a way, since the growth of EK and Dubai goes hand in hand, and because Dubai isn't suddenly a poor country. But together they grew, but it seems like together they are falling too.


Interesting thoughts, but you forget something: the 95% drop in demand for passenger flights and the world not hungry for oil anymore are not forever, this is a temporary situation that will improve over time.
Also Emirates can compete pretty well unlike Pan Am in their final years and they have no terrorism problem + the government is willing to give them cash if needed.

But I think as well that Emirates is the Airline in the world that comes Pan Am closest.
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Gremlinzzzz
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Re: EK's possible future?

Mon May 04, 2020 3:34 am

Toinou wrote:
I never wanted to say that you can do every kind of business without meeting in person. Just that in many fields where it was said to be impossible to work without travel, people suddenly realized in the last months that they can still do quite a lot of business using video-conference. I think that this may well be a lasting legacy of this situation. Will business travel bounce back? Obviously. Will it bounce to the level it was, I wouldn't be surprised if it doesn't.
Besides video-conference, your explanation overlook another aspect: many large companies, in the fields you mention, have global network of subsidiaries or associates that can do many local businesses for them.
You talk about precious metals trade. I know quite well how it works an I can tell you that most people travel very few. The metals do, in very controlled circuits, with a few trusted people making sure that everything is working according to standards. So in this aspect, the need is more about cargo transport. I wouldn't say they same about precious stones. This still drives many people to travel as there is much less trust.
Anyone looking to trade precious metals travels. Anyone looking to trade precious stones, travels. And it is not isolated to simply the big conglomerates.......there are a lot of smaller companies and individuals looking to, and having success cutting off the middle man.

Secondly, all large companies trading commodities travel, and a lot. Why do you think corporate contracts exist when it comes to airlines? And why do they do it when they can just teleconference? Is there waste? Yes, but if you are not traveling, you are losing business and in this age where there is more demand to expand revenues, get more agreements in place, increase partnerships...........an age of globalization and increased competition.

Lastly, no business works on the basis of trust, and this is why we have contracts, proof of payment etc.
 
PANAMsterdam
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Re: EK's possible future?

Mon May 04, 2020 9:19 am

DLHAM wrote:

Interesting thoughts, but you forget something: the 95% drop in demand for passenger flights and the world not hungry for oil anymore are not forever, this is a temporary situation that will improve over time.
Also Emirates can compete pretty well unlike Pan Am in their final years and they have no terrorism problem + the government is willing to give them cash if needed.

But I think as well that Emirates is the Airline in the world that comes Pan Am closest.


But we don't know how long this temporary drop in demand will be. And even if passenger numbers will recover a bit, EK still only has a fleet of gigantic A380's and 777's.
Each airline can be hit by terrorism, and EK too. Let's hope that will never never never never happen, but see what happend to flight IR655, MH17 and more recently PS752.

First and foremost: everyone's health is the number one priority but let's hope for us AV geeks that the industry will recover as quickly as it collapsed, but I have my doubts :cry:
Every country has an airline. The world has Pan Am.
 
Scotron12
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Re: EK's possible future?

Mon May 04, 2020 9:53 am

Various projections are out there, most estimate 2023/2024. Which hopefully includes vaccine.

EK right now plan to restart flights in July. Guess will depend a lot how quickly countries end their lockdowns and quarantines.

Let's hope they have the financials to stick it out. Not that they will go bust. But it will cost a lot.
 
Jomar777
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Re: EK's possible future?

Mon May 04, 2020 10:08 am

Gremlinzzzz wrote:
VSMUT wrote:
Dubai has long since reached a stage where it will remain relevant as a regional trade center. It isn't going away. There will always be a need for air transport to and from Dubai. That said, I believe it will shrink, both the airline and the city.
For Emirates, I see a smaller future where connecting Dubai and the UAE to the world is going to make up a bigger part than connecting Europe and Asia.
They will still hold a massive advantage in the developing world. In markets such as Africa to Asia and ME to anywhere they hold stronger cards than pretty much any other airline.

Their future is probably smaller more efficient aircraft which is why they were maybe interested in A330's and A350's. Emirates and other hub carriers will always have a presence in Europe, and a significant one because of how aviation is structured. Hubs are still king because even the biggest European carriers cannot justify flying point to point and long haul from some of the smaller airports.

So long as there is a premium to fly non stop, and the middle east/Asian carriers offer cheaper one stop options, there will be a significant market that they can tap onto going forward. Not to mention that their service is top quality.


Firstly, I believe that EK's "interest" on the A330 and A350 came as a compromise with Airbus so that they could cancel any remaining A380s they had on order. This allowed Airbus to effectively close the books on the A380 with some offset as well as avoided EK having to pay a huge fine for the order cancellation.

Dubai will continue to play a role as you stated but the HUB situation may change since you will have less people flying on aircrafts that are more modern, more economic and have more range. This will allow more point-to-point travel and reduce risks of potential exposure to diseases whilst on transit.

The big HUB idea was Airbus' view of the future when it implemented the A3XX project and it was something that had its place when loads of people were flying and we did not have aircrafts able to make a journey like, for example, LHR-SYD. The load factor was too high for a single aircraft and prices were way too high, making connections a cheap and effective way to go around the world.
 
Jomar777
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Re: EK's possible future?

Mon May 04, 2020 10:13 am

JayinKitsap wrote:
PANAMsterdam wrote:
MartijnNL wrote:
There is hardly any oil in the country.

I'm sorry but I don't understand this point, could you please explain that further? What i read is that 45% of the export of the UAE is crude oil.

From Wiki:
The sovereign constitutional monarchy is a federation of seven emirates consisting of Abu Dhabi (which serves as the capital), Ajman, Dubai, Fujairah, Ras Al Khaimah, Sharjah and Umm Al Quwain. Their boundaries are complex, with numerous enclaves within the various emirates.[9] Each emirate is governed by a ruler; together, they jointly form the Federal Supreme Council. One of the rulers serves as the President of the United Arab Emirates.


https://en.wikipedia.org/wiki/United_Arab_Emirates

Financially, each of the 7 emirates functions as a separate country. The UAE is like a mini EU for them. Dubai has almost no oil, but Abu Dhabi has a lot.
They are more like the USA. Only that the so called ruler is always from Dubai and the Prime Minister (with basically as much power but less public appearances) is from Abu Dhabi (or vice-versa but always from these Emirates).

Oil IS a very important commodity for them.

The one where GAS takes prerogative is Qatar.
 
Jomar777
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Re: EK's possible future?

Mon May 04, 2020 10:16 am

Toinou wrote:
Is India really considered a "high revenue market"?


Course it is. It caters for all expats working in the Middle East (but Qatar nowadays) industry - millions of them.
It also, because of the above, provides connections from remote parts of India to Europe and the World.
 
Gremlinzzzz
Posts: 68
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Re: EK's possible future?

Mon May 04, 2020 10:38 am

Jomar777 wrote:
Gremlinzzzz wrote:
VSMUT wrote:
Dubai has long since reached a stage where it will remain relevant as a regional trade center. It isn't going away. There will always be a need for air transport to and from Dubai. That said, I believe it will shrink, both the airline and the city.
For Emirates, I see a smaller future where connecting Dubai and the UAE to the world is going to make up a bigger part than connecting Europe and Asia.
They will still hold a massive advantage in the developing world. In markets such as Africa to Asia and ME to anywhere they hold stronger cards than pretty much any other airline.

Their future is probably smaller more efficient aircraft which is why they were maybe interested in A330's and A350's. Emirates and other hub carriers will always have a presence in Europe, and a significant one because of how aviation is structured. Hubs are still king because even the biggest European carriers cannot justify flying point to point and long haul from some of the smaller airports.

So long as there is a premium to fly non stop, and the middle east/Asian carriers offer cheaper one stop options, there will be a significant market that they can tap onto going forward. Not to mention that their service is top quality.


Firstly, I believe that EK's "interest" on the A330 and A350 came as a compromise with Airbus so that they could cancel any remaining A380s they had on order. This allowed Airbus to effectively close the books on the A380 with some offset as well as avoided EK having to pay a huge fine for the order cancellation.

Dubai will continue to play a role as you stated but the HUB situation may change since you will have less people flying on aircrafts that are more modern, more economic and have more range. This will allow more point-to-point travel and reduce risks of potential exposure to diseases whilst on transit.

The big HUB idea was Airbus' view of the future when it implemented the A3XX project and it was something that had its place when loads of people were flying and we did not have aircrafts able to make a journey like, for example, LHR-SYD. The load factor was too high for a single aircraft and prices were way too high, making connections a cheap and effective way to go around the world.
The hub and spoke model is not going anywhere. Try flying from a smaller city, where there is not enough traffic or competition and see how much you will pay to go non stop to a big city.

Hubs increase competition, they give consumers options on time, and they host airlines from a whole host of nations. Heathrow, CDG, Frankfurt, JFK, HKG, Changi........these huge hubs are going nowhere regardless of how efficient planes get.
 
dtw2hyd
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Re: EK's possible future?

Mon May 04, 2020 11:08 am

Gremlinzzzz wrote:
Try flying from a smaller city, where there is not enough traffic or competition and see how much you will pay to go non stop to a big city.


Assuming traffic is down by considerable amount, most airlines will be charging reasonable fares i.e., not heavily discounted, and every other seat has to be kept empty, it will open up lot of P2P routes.

What will be A321XLR range with every middle seat unoccupied, 77W cannot compete.

Super Hubs and VLA enabled only some airlines to dump capacity and throw in hub efficiency as a talking point.
All posts are just opinions.
 
Gremlinzzzz
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Re: EK's possible future?

Mon May 04, 2020 11:25 am

dtw2hyd wrote:
Assuming traffic is down by considerable amount, most airlines will be charging reasonable fares i.e., not heavily discounted, and every other seat has to be kept empty, it will open up lot of P2P routes.

What will be A321XLR range with every middle seat unoccupied, 77W cannot compete.

Super Hubs and VLA enabled only some airlines to dump capacity and throw in hub efficiency as a talking point.

How many XLR's are there in the market?
How many routes can you cover? Could you go Hong Kong to London? Chinese east coast to Western Europe? Europe to South East Asia? West Africa into Asia? How many schedules would you run?
How would you adapt in several years time when traffic is back?
Why would anyone make long term bets on a plane that has limited range and capacity?

Super hubs are going nowhere. Airlines will not charge less to fly non stop from smaller towns where there is limited competition, and they are unlikely to fly those routes because you would need a tonne of equipment.
 
dtw2hyd
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Re: EK's possible future?

Mon May 04, 2020 11:42 am

Gremlinzzzz wrote:
How many XLR's are there in the market?
How many routes can you cover? Could you go Hong Kong to London? Chinese east coast to Western Europe? Europe to South East Asia? West Africa into Asia? How many schedules would you run?
How would you adapt in several years time when traffic is back?
Why would anyone make long term bets on a plane that has limited range and capacity?

Super hubs are going nowhere. Airlines will not charge less to fly non stop from smaller towns where there is limited competition, and they are unlikely to fly those routes because you would need a tonne of equipment.


We are talking about EK here, lets not bring in the discussion about strategic visions. EK scores an F in that subject.

In any hypothetical model a smaller framer has more usability than its larger counterpart.
If traffic comes back, charge more fares, fill the middle seat, and there will be 1000s of grounded WBs ready to picked up.
All posts are just opinions.
 
Gremlinzzzz
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Re: EK's possible future?

Mon May 04, 2020 12:09 pm

dtw2hyd wrote:
Gremlinzzzz wrote:
How many XLR's are there in the market?
How many routes can you cover? Could you go Hong Kong to London? Chinese east coast to Western Europe? Europe to South East Asia? West Africa into Asia? How many schedules would you run?
How would you adapt in several years time when traffic is back?
Why would anyone make long term bets on a plane that has limited range and capacity?

Super hubs are going nowhere. Airlines will not charge less to fly non stop from smaller towns where there is limited competition, and they are unlikely to fly those routes because you would need a tonne of equipment.


We are talking about EK here, lets not bring in the discussion about strategic visions. EK scores an F in that subject.

In any hypothetical model a smaller framer has more usability than its larger counterpart.
If traffic comes back, charge more fares, fill the middle seat, and there will be 1000s of grounded WBs ready to picked up.
You are stating that airlines that are going to defer orders left, right and center should now start ordering a plane that is not even in service, that they would need a lot of to fill schedules, and is lacking in range.

No airline that was flying 7 A380's into Heathrow is looking to fly 7 A321 XLR's. And when demand comes back, they will just fill seats and continue flying the same A321 XLR's. The likes of Qatar Airways, Etihad, Emirates, Thai, Philippines, Singapore Airlines, Cathay Pacific, Vietnam Airlines, China Eastern, China Southern, Qantas, British Airways, Ethiopian, Air France, KLM, Lufthansa etc are not changing their model, adding extra stops to fit the A321 XLR.

There is a plane for every airline and a plane for every application. The A380 has done wonders for Emirates, same as the 777. The 747 has done wonders for British Airways.
 
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brianK73
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Re: EK's possible future?

Mon May 04, 2020 12:27 pm

Gremlinzzzz wrote:
There is a plane for every airline and a plane for every application. The A380 has done wonders for Emirates, same as the 777. The 747 has done wonders for British Airways.

The phrase, "for every application" has a big implied assumption. That is "for the socioeconomic condition of the given time and place."

The recent popularity of new, fuel efficient planes may make sense only when the fuel is expensive and the capital cost is low.

Also, in terms of containment of communicable diseases, it may be unwise to bring passengers from around the world to a single location, such as Dubai, only to disperse them to every single corner of the earth.
 
dtw2hyd
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Re: EK's possible future?

Mon May 04, 2020 12:58 pm

Gremlinzzzz wrote:
You are stating that airlines that are going to defer orders left, right and center should now start ordering a plane that is not even in service, that they would need a lot of to fill schedules, and is lacking in range.

No, I am not. Just gave A321XLR as an example. Any load restricted narrow body can do 6hr 30min DXB-LHR trip, and with no bailout to BA, LHR slots will be wide open.


Gremlinzzzz wrote:
No airline that was flying 7 A380's into Heathrow is looking to fly 7 A321 XLR's. And when demand comes back, they will just fill seats and continue flying the same A321 XLR's. The likes of Qatar Airways, Etihad, Emirates, Thai, Philippines, Singapore Airlines, Cathay Pacific, Vietnam Airlines, China Eastern, China Southern, Qantas, British Airways, Ethiopian, Air France, KLM, Lufthansa etc are not changing their model, adding extra stops to fit the A321 XLR.

There is a plane for every airline and a plane for every application. The A380 has done wonders for Emirates, same as the 777. The 747 has done wonders for British Airways.


Every other airline except Emirates has mixed fleet and capacity discipline, lack of vision and lack of capacity discipline is going bite Emirates.

I could be wrong, but my predictions about Emirates have been correct, for seven years.
All posts are just opinions.
 
Galore
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Re: EK's possible future?

Mon May 04, 2020 1:01 pm

Gremlinzzzz wrote:
lightsaber wrote:
Gremlinzzzz wrote:
in fact, most business cannot be done in this manner. If you are in the clothing business, you have to travel to ascertain the quality of goods. If you are an art dealer, you have to travel, if you deal precious metals, you have to do the same. If you are dealing agricultural produce, if you design electronics.........most businesses that are not service oriented demand this.


That sounds logical. The question is, is this type of business travel prevalent and enough to matter? I’ve been traveling “on business” since 1998. My company paid for business class only for about one year in 2000. The travel policy has gotten extremely restrictive regarding airfare (not hotels, those stayed lavish throughout) because the choice is usually $1200 coach DFW-HKG or $12000 business class (that’s all short notice / 2 days).

We’ve now in the first time in human history ever been able to do everything that we’ve always done via these trips through video conferencing, because we *had no choice* and it works amazingly well.

While I’m certainly not replaceable, I’m fairly well established at my job and I will be as reluctant as possible to ever set a foot into a 15 hour coach cabin “on business (lol)”. My boss better have an absolute extreme line down situation where I have to be physically present to ask me to subject myself to that horrific experience (now with 15 hour mask requirement. In a 3-4-3 777 with 30” pitch - NO.). I have been grumbling about this before this pandemic but now I will simply not agree to fly “on business” but offer to be available 24/7 via WebEx. Added bonus: The customer can work with me without having to wait 2 days.

I’m pretty sure I’m not the only one in this situation. My (huge) employer isn’t an exception requiring to fly coach. The coach cabins were full with people like me - “business” travelers who fly not to land a multi million dollar deal (these people from my employer fly the company jet and not commercial anyways) but to keep operations running. And that can be done 95% via video conferencing.
 
Gremlinzzzz
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Re: EK's possible future?

Mon May 04, 2020 2:33 pm

brianK73 wrote:
The phrase, "for every application" has a big implied assumption. That is "for the socioeconomic condition of the given time and place."

The recent popularity of new, fuel efficient planes may make sense only when the fuel is expensive and the capital cost is low.

Also, in terms of containment of communicable diseases, it may be unwise to bring passengers from around the world to a single location, such as Dubai, only to disperse them to every single corner of the earth.

How many airlines will fly a 747 on a regional route in Europe? How many will have what it takes to fly an A380 on a 45 minute or less than two hour trip? How many airlines in Europe will fly twin aisle jets as much as Asian carriers do on regional routes or even local routes as happens in Japan?

A plane might be a good fit for one airline and not a great fit or another. For an airline that has targeted rich cities and emerging markets where travel is bound to explode, formed a brand, and where they mostly enjoy a pricing advantage, having the biggest jets in the market makes sense for Emirates.

dtw2hyd wrote:
No, I am not. Just gave A321XLR as an example. Any load restricted narrow body can do 6hr 30min DXB-LHR trip, and with no bailout to BA, LHR slots will be wide open.

Every other airline except Emirates has mixed fleet and capacity discipline, lack of vision and lack of capacity discipline is going bite Emirates.

I could be wrong, but my predictions about Emirates have been correct, for seven years.
Emirates established itself in Asia, Africa and Oceania. In Europe, it has performed better than some of the legacy carriers on long haul routes that they compete in. Having the biggest jets was key to that, and it is something that then established Dubai not only as a business and trading hub, but also a tourist attraction.

Emirates has grown with the 777 and the A380, and Dubai has reaped the benefits. Going for smaller aircraft is to cede market share. When all is said and done, they will have to go with the 777x/8 and the A350 to replace the A380 to keep most of the capacity they now have. To do anything else is madness.

The hub and spoke model is not dying, and will not die for ages. As long as it is in practice, super hubs, and key time slots will always matter. New comers will have a harder time getting in especially on long haul routes where you have established players. This virus situation is making people overreact.
 
Exeiowa
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Re: EK's possible future?

Mon May 04, 2020 3:26 pm

I think that EK biggest problem is that it links US and Europe with India and Africa. These two area are going to have a very long fight to bring this disease back under control dampening a desire by travelers to head for these destinations.
 
THS214
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Re: EK's possible future?

Mon May 04, 2020 3:34 pm

ewt340 wrote:
Well, the answer might be cargo. With cargo compatible configurations currently available, this might be a good strategy, and again, Dubai location is just in the middle between Asia and Africa/Europe. Many of the flights are short enough for them to maximize the cargo payload using long-range aircraft like B777-300ER.


That is an urban legend and was creating by a marketing person who didn't care about truth, or thought that world is flat. Tokyo, Shanghai and even Hong Kong to Vienna via Helsinki is significantly shorter than via Dubai. Even Hong Kong to Vienna is 550 miles shorter via Helsinki than via Dubai and via Amsterdam just 60 miles longer than via Dubai. And this route is good towards Emirates. Pick up Seoul and via Helsinki or Amsterdam is significantly shorter that via Dubai Via Helsinki its over 1 500 miles shorter and via Amsterdam its 900 miles shorter.

I picked Vienna as it makes numbers good to Dubai. Make it Paris and those numbers are even worse to Emirates. On those routes from Hong Kong the difference is like 900 miles.
 
ewt340
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Re: EK's possible future?

Tue May 05, 2020 2:52 am

THS214 wrote:
ewt340 wrote:
Well, the answer might be cargo. With cargo compatible configurations currently available, this might be a good strategy, and again, Dubai location is just in the middle between Asia and Africa/Europe. Many of the flights are short enough for them to maximize the cargo payload using long-range aircraft like B777-300ER.


That is an urban legend and was creating by a marketing person who didn't care about truth, or thought that world is flat. Tokyo, Shanghai and even Hong Kong to Vienna via Helsinki is significantly shorter than via Dubai. Even Hong Kong to Vienna is 550 miles shorter via Helsinki than via Dubai and via Amsterdam just 60 miles longer than via Dubai. And this route is good towards Emirates. Pick up Seoul and via Helsinki or Amsterdam is significantly shorter that via Dubai Via Helsinki its over 1 500 miles shorter and via Amsterdam its 900 miles shorter.

I picked Vienna as it makes numbers good to Dubai. Make it Paris and those numbers are even worse to Emirates. On those routes from Hong Kong the difference is like 900 miles.


You don't understand. The reason EK's cargo could dominate is to provide a bottom rock price that resulted on losses just to keep the business going.
Truth is, whichever cheaper options available. Those options gonna get popular.

Southeast Asia/South Asia - Africa/Europe would also be a big factor for them. Also, let's be realistic here, majority of products gonna come from Canton region, Vietnam, Bangladesh and India.

You don't use the straight line to determine which routes work. You determine by price. It might be longer by 60-900 miles sure, but if it's $10,000 cheaper, do you think they would just slide it off when the difference is less than 1-3 hour flights?
 
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LAX772LR
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Re: EK's possible future?

Tue May 05, 2020 7:41 am

dtw2hyd wrote:
International business travel is not going to reach pre-COVID19 levels anytime soon.
International VFR will never reach pre-COVID19 levels.

You have these exactly backwards:
  • People aren't going to stop visiting their families or vacationing, it's just going to take a bit to recover to previous levels. That's something no other technology can replace, supplement, or replicate-- not until a teleporter is invented, anyway.
  • There is essentially nil reason for int'l biz travel to be what it was: e-meeting has grown each time a disaster (1998, 2001, 2003, 2008/9, etc) has affected the air travel market, and the technology's proficiency has grown by a quantum leap in 2020 since any of those times.



dtw2hyd wrote:
EK runs on the premise of free travel

Huh?
I myself, suspect a more prosaic motive... ~Thranduil
 
Toinou
Posts: 257
Joined: Sun Apr 14, 2019 8:21 am

Re: EK's possible future?

Tue May 05, 2020 7:52 am

LAX772LR wrote:
dtw2hyd wrote:
EK runs on the premise of free travel

Huh?

I guess in this case "free travel" means that the business model of EK is based on the fact that people have the freedom to travel.
 
dtw2hyd
Posts: 8272
Joined: Wed Jan 09, 2013 12:11 pm

Re: EK's possible future?

Tue May 05, 2020 11:14 am

International VFR
1) Do people wish to travel, yes humans always want to travel
2) Can people afford to travel. Depends on economy, most likely people will cut discretionary spending
3) Do countries welcome international tourists with open arms. In pre-COVID19, if you are bringing enough cash to spend, you were welcome, now are you carrying a highly communicable disease.

Corporate Travel
1) Do employees want to travel. Yes.
2) Can corporations afford? Less than pre-COVID19. Corp travel is the first victim when companies are in cash conservation mode.
3) Does technology reduce corporate travel? More than before. If you could complete a task remotely during COVID-19 lockdown, sure you can post lockdown.
4) Domestic corp travel related issue. Can training be done remotely? Yes, online or even onsite training may become preferred choice. One instructor from Salesforce training 20 of your employees at your site is always cheaper.
5) Do countries keep relatively open borders. Not like in the past.

Why is it so difficult to understand traffic volumes won't be the same? VFR or Corp, both have issues.
All posts are just opinions.
 
THS214
Posts: 339
Joined: Thu Jul 27, 2017 4:01 pm

Re: EK's possible future?

Tue May 05, 2020 4:17 pm

ewt340 wrote:
THS214 wrote:
ewt340 wrote:
Well, the answer might be cargo. With cargo compatible configurations currently available, this might be a good strategy, and again, Dubai location is just in the middle between Asia and Africa/Europe. Many of the flights are short enough for them to maximize the cargo payload using long-range aircraft like B777-300ER.


That is an urban legend and was creating by a marketing person who didn't care about truth, or thought that world is flat. Tokyo, Shanghai and even Hong Kong to Vienna via Helsinki is significantly shorter than via Dubai. Even Hong Kong to Vienna is 550 miles shorter via Helsinki than via Dubai and via Amsterdam just 60 miles longer than via Dubai. And this route is good towards Emirates. Pick up Seoul and via Helsinki or Amsterdam is significantly shorter that via Dubai Via Helsinki its over 1 500 miles shorter and via Amsterdam its 900 miles shorter.

I picked Vienna as it makes numbers good to Dubai. Make it Paris and those numbers are even worse to Emirates. On those routes from Hong Kong the difference is like 900 miles.


You don't understand. The reason EK's cargo could dominate is to provide a bottom rock price that resulted on losses just to keep the business going.
Truth is, whichever cheaper options available. Those options gonna get popular.

Southeast Asia/South Asia - Africa/Europe would also be a big factor for them. Also, let's be realistic here, majority of products gonna come from Canton region, Vietnam, Bangladesh and India.

You don't use the straight line to determine which routes work. You determine by price. It might be longer by 60-900 miles sure, but if it's $10,000 cheaper, do you think they would just slide it off when the difference is less than 1-3 hour flights?


I fully understand. You wrote " Dubai location is just in the middle between Asia and Africa/Europe." and its not true. Now you write that price is what matters and I fully agree. But that is not what you wrote and what I responded.
 
Jomar777
Posts: 554
Joined: Tue Oct 20, 2015 8:45 am

Re: EK's possible future?

Tue May 05, 2020 9:23 pm

Gremlinzzzz wrote:
Jomar777 wrote:
Gremlinzzzz wrote:
Their future is probably smaller more efficient aircraft which is why they were maybe interested in A330's and A350's. Emirates and other hub carriers will always have a presence in Europe, and a significant one because of how aviation is structured. Hubs are still king because even the biggest European carriers cannot justify flying point to point and long haul from some of the smaller airports.

So long as there is a premium to fly non stop, and the middle east/Asian carriers offer cheaper one stop options, there will be a significant market that they can tap onto going forward. Not to mention that their service is top quality.


Firstly, I believe that EK's "interest" on the A330 and A350 came as a compromise with Airbus so that they could cancel any remaining A380s they had on order. This allowed Airbus to effectively close the books on the A380 with some offset as well as avoided EK having to pay a huge fine for the order cancellation.

Dubai will continue to play a role as you stated but the HUB situation may change since you will have less people flying on aircrafts that are more modern, more economic and have more range. This will allow more point-to-point travel and reduce risks of potential exposure to diseases whilst on transit.

The big HUB idea was Airbus' view of the future when it implemented the A3XX project and it was something that had its place when loads of people were flying and we did not have aircrafts able to make a journey like, for example, LHR-SYD. The load factor was too high for a single aircraft and prices were way too high, making connections a cheap and effective way to go around the world.
The hub and spoke model is not going anywhere. Try flying from a smaller city, where there is not enough traffic or competition and see how much you will pay to go non stop to a big city.

Hubs increase competition, they give consumers options on time, and they host airlines from a whole host of nations. Heathrow, CDG, Frankfurt, JFK, HKG, Changi........these huge hubs are going nowhere regardless of how efficient planes get.


As you can see with LGW (although much smaller than LHR), HUBS can actually suffer if demand is not there. Maybe the US will be more impervious given that loads of cities where, in Europe for example, you would normally drive/take a train to, a flight is the best available option. But otherwise... If there's no enough demand, P2P will cater for those and hubs will mainly come into play when there's enough demand to warrant a connection (and henceforth, lower prices).
 
Aither
Posts: 1284
Joined: Mon Oct 25, 2004 3:43 am

Re: EK's possible future?

Wed May 06, 2020 12:11 am

dtw2hyd wrote:
International VFR
1) Do people wish to travel, yes humans always want to travel
2) Can people afford to travel. Depends on economy, most likely people will cut discretionary spending
3) Do countries welcome international tourists with open arms. In pre-COVID19, if you are bringing enough cash to spend, you were welcome, now are you carrying a highly communicable disease.

Corporate Travel
1) Do employees want to travel. Yes.
2) Can corporations afford? Less than pre-COVID19. Corp travel is the first victim when companies are in cash conservation mode.
3) Does technology reduce corporate travel? More than before. If you could complete a task remotely during COVID-19 lockdown, sure you can post lockdown.
4) Domestic corp travel related issue. Can training be done remotely? Yes, online or even onsite training may become preferred choice. One instructor from Salesforce training 20 of your employees at your site is always cheaper.
5) Do countries keep relatively open borders. Not like in the past.

Why is it so difficult to understand traffic volumes won't be the same? VFR or Corp, both have issues.


Less traffic means less airlines, less routes, less frequencies. In that picture EK could gain market shares. The argument that people will not want to mix at hubs is valid for short haul. On long haul however do you think connecting at Paris or London is better ? all these airports mix passengers from many regions as well.
However DXB or SIN are state of the art airports full of cheap workers to make sure that things get cleaned every hour. Other hubs cannot match this. So If I have to travel long haul now, I would definitely fly through DXB instead of any other airport.

Regarding your comments on travel demand your points are valid however there are counterpoints for every argument you are saying. When there are crises people also travel to find jobs or new markets for their products. People also travel when after a health crisis you start to think you should not postpone things you always wanted to do. Diversifying the supply chain is a hot topic in the business community : if you go for more but smaller manufactures all other the places that will stimulate demand for business reasons. Video conferences are not new. Today it's much talked about because we started telework between colleagues living in the same cities.
Never trust the obvious
 
ewt340
Posts: 1246
Joined: Tue Jul 10, 2012 7:22 pm

Re: EK's possible future?

Wed May 06, 2020 1:11 am

THS214 wrote:
ewt340 wrote:
THS214 wrote:

That is an urban legend and was creating by a marketing person who didn't care about truth, or thought that world is flat. Tokyo, Shanghai and even Hong Kong to Vienna via Helsinki is significantly shorter than via Dubai. Even Hong Kong to Vienna is 550 miles shorter via Helsinki than via Dubai and via Amsterdam just 60 miles longer than via Dubai. And this route is good towards Emirates. Pick up Seoul and via Helsinki or Amsterdam is significantly shorter that via Dubai Via Helsinki its over 1 500 miles shorter and via Amsterdam its 900 miles shorter.

I picked Vienna as it makes numbers good to Dubai. Make it Paris and those numbers are even worse to Emirates. On those routes from Hong Kong the difference is like 900 miles.


You don't understand. The reason EK's cargo could dominate is to provide a bottom rock price that resulted on losses just to keep the business going.
Truth is, whichever cheaper options available. Those options gonna get popular.

Southeast Asia/South Asia - Africa/Europe would also be a big factor for them. Also, let's be realistic here, majority of products gonna come from Canton region, Vietnam, Bangladesh and India.

You don't use the straight line to determine which routes work. You determine by price. It might be longer by 60-900 miles sure, but if it's $10,000 cheaper, do you think they would just slide it off when the difference is less than 1-3 hour flights?


I fully understand. You wrote " Dubai location is just in the middle between Asia and Africa/Europe." and its not true. Now you write that price is what matters and I fully agree. But that is not what you wrote and what I responded.


Uhmm sir, the map said otherwise. Dubai is located in the middle east. It's a perfect crossroad between southeast asia/south asia to Europe or East asia and Africa.
 
Gremlinzzzz
Posts: 68
Joined: Fri Jan 24, 2020 4:28 am

Re: EK's possible future?

Wed May 06, 2020 2:06 am

Jomar777 wrote:
As you can see with LGW (although much smaller than LHR), HUBS can actually suffer if demand is not there. Maybe the US will be more impervious given that loads of cities where, in Europe for example, you would normally drive/take a train to, a flight is the best available option. But otherwise... If there's no enough demand, P2P will cater for those and hubs will mainly come into play when there's enough demand to warrant a connection (and henceforth, lower prices).
Each and every airport suffers when demand is not there.

BA is not going to fly to Nairobi from Manchester.
Lufthansa is not going to fly to Cape Town from Dusseldorf.
Alitalia is not going to go to New York from Sardinia.
Air France is not going to go to SFO from Cote d'Azur.
Iberia is not going to fly form Lanzarote to Dubai.
Ethiopian is not going to fly to Mumbai from Awassa.

All these mega hubs have one thing in common, they are wide body jet magnets with daily schedules being run to a multitude of destinations nonstop. They were purpose built to leverage narrow body jets that lack range from various local and regional cities where traffic may not be high, and regional routes where there might be wide body demand e.g. a 767, to connect more destinations from a single airport.

Mega hubs have their place in aviation, they will continue to exist whether there is a crisis or whether there is none. This crisis will wipe out some of the weaker airlines, it will see to it that there is a shrinkage in some of the larger airlines as they meet lower demand. You might see lower prices at the start, but as excess capacity is wiped out, and competition shrinks, you will see increased prices. In the interim, you may simply see what happened in the US after 9/11 where airlines ended up cutting free food from domestic flights. Either way, hubs are still going to be here.
 
myki
Posts: 195
Joined: Wed Sep 05, 2018 6:43 am

Re: EK's possible future?

Wed May 06, 2020 3:42 am

ewt340 wrote:
THS214 wrote:
ewt340 wrote:

You don't understand. The reason EK's cargo could dominate is to provide a bottom rock price that resulted on losses just to keep the business going.
Truth is, whichever cheaper options available. Those options gonna get popular.

Southeast Asia/South Asia - Africa/Europe would also be a big factor for them. Also, let's be realistic here, majority of products gonna come from Canton region, Vietnam, Bangladesh and India.

You don't use the straight line to determine which routes work. You determine by price. It might be longer by 60-900 miles sure, but if it's $10,000 cheaper, do you think they would just slide it off when the difference is less than 1-3 hour flights?


I fully understand. You wrote " Dubai location is just in the middle between Asia and Africa/Europe." and its not true. Now you write that price is what matters and I fully agree. But that is not what you wrote and what I responded.


Uhmm sir, the map said otherwise. Dubai is located in the middle east. It's a perfect crossroad between southeast asia/south asia to Europe or East asia and Africa.

It is in the Middle East, but the middle for who?

http://www.gcmap.com/mapui?P=c%3Ablack% ... blue&DU=mi

Going via DXB means a big detour for some, or a small detour for others. When it comes to cargo though, time isn't always the most important factor though so to save some coin, a detour could be acceptable.
 
xwb777
Posts: 807
Joined: Wed Jan 17, 2018 4:13 pm

EK's possible future?

Wed May 06, 2020 5:04 am

According to the following interview, Sir Tim Clark is currently finding a way out and a solution for the grounding.

Sir Tim stated that the A380 and B747 era is over and the way forward going into the future is with both the A350 & B787.

Source: https://amp-thenational-ae.cdn.ampproje ... -1.1015208


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