|Quoting United787 (Reply 77):|
Quoting Hightower (Reply 58):
I can't help but thinking this idea of a world hub in the middle east is bound to crash eventually... with Etihad, Qatar and Emirates making mega orders, all based in the same area more or less...
I have yet to hear a good explanation of what Etihad, Qatar and Emirates are going to be doing with all of these aircraft.
A megahub??? For who???
For the Americas, the middle east is on the way to nowhere, maybe the Seychelles. It would have to be a destination, which it is becoming, but there are limits to it. We already have our own fabricated mega desert destination.
For Europe, the middle east is too far south for most Asia and Oceania destinations and too far east for most Africa destinations. I know it isn't too far out of the way for Europe to India and Southeast Asia destinations although I think Tashkent would make a better mega hub for Europe to Asia connections, it could be like the Chicago of Eurasia!
For Asia, the middle east is too far south for most Europe destinations.
Maybe they are thinking of tapping into the lucrative central Asian - northern African market.
Excellent - I was just about to invest in EK
. There was me thinking they had a coherent business strategy and a well-planned future, but just in time you step in to tell us that all those hundreds of billions of dollars are wasted on a plan that is geographically unsound.
Seriously though - I refer you to a cut and pasted post I made about seven months ago on this very topic that is far too lengthy to re-type.
There seems to be a lot of people on here who feel that EK
are clueless are are some kind of rich-man's plaything, and who are looking down their noses at them.
are an airline I know *a lot* about, and I've been to DXB
several times, seen how they operate, and done some research about their operations, and particularly about their approach to forecasting and yield management. Let me say this categorically:
are extremely shrewd, and are very, very good at what they do.
People slate them because they were apparently built on Arab oil dollars (which isnt actually the case) and say that they are not playing fair in the market because of the kind of bottomless money behind them that they do not have to pay back and the extremely rapid expansion shown by the airline, as if that was a negative thing. Analysts call it "The Magpie Effect" - buying everything new and shiny because its there and not really thinking it through - people have said EK
have done this. Rubbish.
have always had a hub-building strategy. Thats the cornerstone to everything they are about. It is important to note that investment in new aircraft and airport etc is actually not soley driven at expanding the airline - it is a cashcow in its own right, but thats a bonus. HRH Sheikh Maktoum has always had a vision to expand Dubai into one of the World's great tourism and commerce centres - he recognises that the oil wont be there forever (Dubai itself doesnt have any oil in reality - lots of investments in other Kingdom's oil deposits and a wealth of other things besides, but no oil of its own). This is the reason for the massive expansion in EK
- the expansion and building going on in the jaw-dropping Dubai developments dwarfs that invested in EK
- remember that. The long term plan was to focus on Dubai as a massive commerce, business, leisure, and tourism centre for the whole MEG
region, and for that the necessary infrastructure needs to be in place - ie: transport.
Dubai has, up in Jebel Ali, one of the most important container portals in the World and it is unquestionably the most important port in the Gulf. The LPG/LNG can stay out in Qatar, and the oil can stay out in Ras Tanura in Saudi and Kharg in Iran - he isnt interested in that (yet) - its all about the major liner hubs, multimodal logistics, super automated megaports - this is one of the reasons the new DXB
airport is moving to Jebel Ali - EK
Cargo has a world beating multimodal portal right there.
Twenty-odd years ago EK
was re-born under Sheikh Maktoum's care (initially his Father actually, IIRC) and he recognised he needed an airline to match his visions for what Dubai was already on the way to being. The place has been a massive trading port and transport centre for hundreds and hundreds of years. He visioned many thousands of people coming from all over the world to Dubai every day, and that demand to travel to and from Dubai as being very large - why should other airlines get all that revenue?
His mandate was for an airline that was massively versatile - the convenient, easy, pleasant experience for the tourists, the focussed, convenient attendant carrier for the business traveller, and the all pervading perfection for the first class passengers. Supreme quality and innovation with a 24 carat gold brand (literally). Factor in a wildly ambitious cargo network, and an immediate addressing of where his potential cash cows lay and you've got the crux of their immediate business plan. He got in the best of the best - no consulting agencies for EK
- he just headhunted the most innovative heads from the majors and also from big business to make EK
work like it is supposed to. Ditto the training pilots and senior cabin crew. Quality at all costs. The company invested in a large training facility, and is widely regarded as one of the most progressive and forward thinking airlines in the World. They also have a first class safety record. The airline needs to fly the most modern, effiicient, impressive new aircraft as the associated prestige of EK
reflects that of Dubai itself and vice versa. He quickly recognised that he had two clear revenue streams right from the off that he could exploit.
One - The hundreds of thousands of immigrant workers going to and from DXB
and India/Pakistan every day.
Two - The DXB
- Western Europe traffic bringing the high yield pax into DXB
from London, Paris etc.
Latterly, in the last ten years we've seen a vast increase in the first two streams, but also the emergence (or at least attendence of) of three more:
Three - The Europe - Asia/Australasia O&D traffic.
Four - DXB
Five - The millions of ex-pat Indian, Pakistani, and Bangladeshi ex-pats living in Europe, particularly the UK.
If any airline has a better grasp of geographically/demographically linked route planning/yield management then I'd love to know who they are.
has also demonstrated another trait that people here seem to sneer at. It is the oft-held holy grail that commonality and the associated efficiency benefits that can come with it, are the be-all-and-end-all. They arent. The right capacity on the right route and the right time with the right yield management is far more important. EK
recognise that tailoring the correct type to a certain route is key - QR
are also particularly good at this.
People cannot envisage what in the World EK
will do with their 49 new A380s - so they therefore assume that because they are (supposedly) crass, oil-bucks-rich Arabs with edifice complexes that they dont have the first idea what they are going to do with them and only bought them due to the Magpie Effect. I promise you, EK
know *EXACTLY* what they are going to do with them. They are extremely clever - an example - most of EKs fleet was not bought outright with dollars. People have this image that the Sheikh just wrote a cheque - it doesnt work like that (most of the time) - They could write a cheque if they wanted to, but they are a bit smarter than that. EK
has financed most of its fleet through major banks like ABN-Ambo, Citi, Morgan Stanley, Deutsche Bank etc - the idea being that the banks and finance houses secure long-term guaranteed risk-free revenue from EK
, and in return they invest billions and billions in property and infrastructure in Dubai - foreign investment is whole premise on which Dubai is built.
A separate LoCo long-haul offshoot? Unlikely - I think their brand is too strong to risk the dilution, and the advantage the extra space will give them in terms of premium class product offerings will see the A380 on their mainline services - no worries.
A personal hunch is that they may consider starting a leasing wing for all those A332, A343 and 777s that will start to appear once their A350/787 order happens - who is to say that some of the A380s will find themselves leased out - as demand increases a lot for the big one once airlines see how good it is (we hope) in service? Who knows?
Please excuse the long post - but in answer to the starter question - how big will EK
I think there is a critical mass for airlines, especially hub-centric ones like EK
, but theres no doubt they can become the dominant long-haul carrier on the planet - and I really dont think they are done yet in terms of route expansion. I dont think there are too many more routes to open, as they fly pretty much everywhere at present, but I think China, Europe, and the US are going to see more routes open in the future. I wouldnt be at all surprised to see EK
become and 300 airframe fleet before too long. I'd say thats pretty dominant.
What do you mean you dont have any bourbon? Do you know how far it is to Houston? What kind of airline is this???