sankaps
Posts: 1692
Joined: Fri Jan 04, 2008 6:51 am

RE: How Can Airlines Compete With EK?

Thu Mar 14, 2013 2:00 pm

Quoting lightsaber (Reply 47):
For example, LHR direly needs frequency to stimulate connections. The airport is down to 30% transfer traffic. But will it expand?

Connections are down because BA realized it is far more profitable to use its finite slots to focus on *much* higher yield London O&D than connections. London is the most premium, highhest yielding O&D market **in the world**. Why would anyone want to stimulate lower-yielding connections unless they had excess capacity or spare slots to fill?

EK makes connections work (despite inherent lower yield) because of their geography, network, product; their huge, brave, and prescient bet on scale; and their COST advantage (partly driven by their scale, partly by cheap labour pool, and partly by favorable labor contract laws) which also gives them more ability to invest in Product. But all other things being equal, even EK would favor DXB O&D over connections if DXB had sufficient O&D volumes and at high enough yields.

[Edited 2013-03-14 07:14:18]
 
Quokkas
Posts: 1327
Joined: Fri Jan 27, 2012 5:51 pm

RE: How Can Airlines Compete With EK?

Thu Mar 14, 2013 2:11 pm

Quoting 1400mph (Reply 48):
You're kidding right ?

During the first Gulf War (August 2, 1990 - February 28, 1991) there was a drop in both passenger numbers and cargo handled at DXB, but it was short-lived.
YearPassengersCargo (Tonnes)
19905.0m144k
19914.4m140k
19925.4m186k


During the second Gulf War (invasion of Iraq, 19 March 2003 – 1 May 2003) traffic appears to be have been unaffected.
YearPassengersCargo (Tonnes)
200216.0m0.76m
200318.0m0.94m
200422.0m1.11m

Source: Dubaifaqs.
Of course, the absence of a serious impact on aviation in the Gulf then does not give an indication of what impact a theoretical war between Israel and Iran may have. The closer proximity to the UAE and the duration of the war and its affect on oil supply would all be factors.
“Not to laugh, not to cry, not to hate, but understand.” Spinoza
 
mcogator
Posts: 538
Joined: Thu Jul 26, 2007 11:51 am

RE: How Can Airlines Compete With EK?

Thu Mar 14, 2013 2:15 pm

Quoting Viscount724 (Reply 18):
EK is unlikely to ever operate Transpacific which is a big and growing market. Few people will ever fly from North America to Japan, Korea or Southeast Asia via DXB.

I think you're way off on the Southeast Asia bit. Flying from the Eastern US to SE Asia via DXB is roughly the same distance. The average traveler might choose to fly JFK-DXB-BKK on brand new A380's, over JFK-NRT-BKK on older 777s or much older 747s.

For example:

JFK-DXB-BKK is 9899 miles.
JFK-NRT-BKK is 9634 miles.

So throw in the rest of the Eastern US, and its viable to go either way.

The biggest difference is that EK offers 6 daily NS flights to BKK from DXB, while DL/UA only have 1 each from NRT. You miss that one flight, and you're screwed for 24 hours.

Same goes for SIN and somewhat MNL, and then you can also add in KUL, CGK, DPS, and other destinations that are extremely difficult to get to via US airlines.
“Traveling – it leaves you speechless, then turns you into a storyteller.” – Ibn Battuta
 
mcogator
Posts: 538
Joined: Thu Jul 26, 2007 11:51 am

RE: How Can Airlines Compete With EK?

Thu Mar 14, 2013 2:26 pm

Quoting adamh8297 (Reply 28):
Agree with you on mostly everything except the fact that East Coast US - Southeast Asia can be and is served via DXB - It may add 1-2 extra hours to your journey.

Actually, it's quicker eastbound on EK, and slower westbound. So basically a wash in total travel time.
“Traveling – it leaves you speechless, then turns you into a storyteller.” – Ibn Battuta
 
MaverickM11
Posts: 17856
Joined: Thu Apr 06, 2000 1:59 pm

RE: How Can Airlines Compete With EK?

Thu Mar 14, 2013 2:46 pm

Quoting DTW2HYD (Reply 44):
Using what equipment? G650s. As long as legacy carrier business model remains "Y is a necessary evil to provide range and comfort to (mostly) freeloaders in F & J", they cannot compete with EK/QR/EY.

In every class there is a spread of passengers that are paying a premium for whatever reason, and even in Y a good number of people will pay a premium for a nonstop. You'll get the F and J passengers on the nonstop for sure, high yield Y, and you can backfill the rest with the same junk that EK might be taking.

Quoting ozglobal (Reply 42):
Your comment only considers US - India traffic. That's a drop in a bucket. The question far broader than that. Also, on a global basis, EK are not positioned as the 'cheap' option. They invest massively in their premium product.

This applies to anything. AF could use smaller 787/350s to overfly DXB and reopen stations that didn't make sense on the 343/777/744, for example Indochina.

Quoting cmf (Reply 27):
It isn't inflicted by EK...

Doesn't mean it's self inflicted then...
E pur si muove -Galileo
 
AngMoh
Posts: 996
Joined: Fri Nov 04, 2011 5:03 am

RE: How Can Airlines Compete With EK?

Thu Mar 14, 2013 3:06 pm

Quoting mcogator (Reply 52):
Same goes for SIN and somewhat MNL, and then you can also add in KUL, CGK, DPS, and other destinations that are extremely difficult to get to via US airlines.

SIN-EWR-SIN non-stop flies over Japan SIN-EWR and over Europe EWR-SIN. But apart from JFK, I have my doubt that there is much traffic to Asia and from ORD it starts to get better to fly over Japan.
Also, for Hongkong, most of China, Japan and Korea you can reach most of the US technically without a stop. The traffic might just not be there to justify this non-stop flight.
727 732 733 734 735 73G 738 739/ER 742 743 744/M 752 753 762 772 77E 773 77W 788 A300 A310 A319 A320 A321 A332 A333 A343 A345 A346 A359 A35K A388 DC-9 DC-10 MD11 MD81 MD82 MD87 F70 ERJ145 E170 E175 E190 E195 ATR72 Q400 CRJ200 CRJ700 CRJ900 BAE146 RJ85
 
dtw2hyd
Posts: 7670
Joined: Wed Jan 09, 2013 12:11 pm

RE: How Can Airlines Compete With EK?

Thu Mar 14, 2013 3:38 pm

Quoting MaverickM11 (Reply 54):
In every class there is a spread of passengers that are paying a premium for whatever reason, and even in Y a good number of people will pay a premium for a nonstop. You'll get the F and J passengers on the nonstop for sure, high yield Y, and you can backfill the rest with the same junk that EK might be taking.

P2P F & J market stability depends on several external economic factors beyond carrier's control, and so called junk may prefer EK leaving legacy carriers with the most popular option, fold ops and leave it to EK.

I thought we are discussing on how to compete with EK not on how to fold.
 
MaverickM11
Posts: 17856
Joined: Thu Apr 06, 2000 1:59 pm

RE: How Can Airlines Compete With EK?

Thu Mar 14, 2013 4:18 pm

Quoting DTW2HYD (Reply 56):
P2P F & J market stability depends on several external economic factors beyond carrier's control, and so called junk may prefer EK leaving legacy carriers with the most popular option, fold ops and leave it to EK.

I have no idea what this means?
E pur si muove -Galileo
 
avek00
Posts: 3228
Joined: Mon Oct 25, 2004 5:56 am

RE: How Can Airlines Compete With EK?

Thu Mar 14, 2013 4:34 pm

Quoting YTZ (Thread starter):
How can airlines in the West and India/South Asia compete with this? I can’t see much of a future for airlines in India under this kind of competition.

They compete through governments and air carriers working together to set up an operating framework whereby home country carriers can leverage the strongest competitive advantage possible -- the ability to offer sufficient nonstop services between desirable gateways at competitive times.

The United States has been extremely aggressive in this regard throughout the 2000s, dispatching diplomats around the world to get Open Skies deals with key air markets finally done, sometimes after decades of foot-dragging by both sides. USA carriers can fly to India/Australia/Japan/European Union countries at-will, have ample access to China flying, and can start service to more or less anywhere in the world they'd like to serve (except Angola) with only a modicum of regulatory fuss. The effect of this paradigm has been to limit the potential horizons of the parasitic third-country air carriers in the USA market -- yes, they will have a significant market presence, but they cannot wholeheartedly eat the lunches of USA legacies in the same manner they're devouring the premium traffic of European legacies whose governments have been, with the notable exception of the UK, far less proactive in liberalizing air service agreements.
Live life to the fullest.
 
mcogator
Posts: 538
Joined: Thu Jul 26, 2007 11:51 am

RE: How Can Airlines Compete With EK?

Thu Mar 14, 2013 4:43 pm

Quoting AngMoh (Reply 55):
SIN-EWR-SIN non-stop flies over Japan SIN-EWR and over Europe EWR-SIN. But apart from JFK, I have my doubt that there is much traffic to Asia and from ORD it starts to get better to fly over Japan.

Yes, but that flight is ending and wasn't it only J passengers anyway?

I would think traffic east and south of Chicago to Asia is still quite significant. If EK teams up with a US airline, such as AA, that would be a whole other ballgame.
“Traveling – it leaves you speechless, then turns you into a storyteller.” – Ibn Battuta
 
sankaps
Posts: 1692
Joined: Fri Jan 04, 2008 6:51 am

RE: How Can Airlines Compete With EK?

Thu Mar 14, 2013 4:59 pm

Quoting avek00 (Reply 58):
The United States has been extremely aggressive in this regard throughout the 2000s, dispatching diplomats around the world to get Open Skies deals with key air markets finally done, sometimes after decades of foot-dragging by both sides. USA carriers can fly to India/Australia/Japan/European Union countries at-will, have ample access to China flying, and can start service to more or less anywhere in the world they'd like to serve (except Angola) with only a modicum of regulatory fuss. The effect of this paradigm has been to limit the potential horizons of the parasitic third-country air carriers in the USA market -- yes, they will have a significant market presence, but they cannot wholeheartedly eat the lunches of USA legacies in the same manner they're devouring the premium traffic of European legacies whose governments have been, with the notable exception of the UK, far less proactive in liberalizing air service agreements.

Avek00 -- despite all of this, I think it is quite clear that on USA O&D routes that go anywhere near the middle-east (eg USA-India), US carriers too have had a big slice of their pie taken by EK and its brethren and have had to pull back. It is only on markets where EK cannot use its geographic location to its advantage that the US carriers are growing (within the Americas; TPAC to East Asia and Australasia, TATL to Europe and West Africa).

So really no different from European and South / SE Asian legacy carriers at all in how they have have been impacted by EK, they are just fortunate to have some more markets that do not geographically fall into EK's natural reach.
 
MaverickM11
Posts: 17856
Joined: Thu Apr 06, 2000 1:59 pm

RE: How Can Airlines Compete With EK?

Thu Mar 14, 2013 5:17 pm

Quoting sankaps (Reply 60):
Avek00 -- despite all of this, I think it is quite clear that on USA O&D routes that go anywhere near the middle-east (eg USA-India), US carriers too have had a big slice of their pie taken by EK and its brethren and have had to pull back.

The market to the Middle East isn't that big from the US. AUH/DOH are barely a blip. DXB is probably the biggest in that corner of the region, but they're all smaller than TLV, which obviously presents different issues. I think EK has made some India nonstops unviable, but other than that I'm not sure what US carriers have backed away from b/c of EK...maybe a DXB nonstop or two.
E pur si muove -Galileo
 
sankaps
Posts: 1692
Joined: Fri Jan 04, 2008 6:51 am

RE: How Can Airlines Compete With EK?

Thu Mar 14, 2013 5:31 pm

Quoting MaverickM11 (Reply 61):
The market to the Middle East isn't that big from the US. AUH/DOH are barely a blip. DXB is probably the biggest in that corner of the region, but they're all smaller than TLV, which obviously presents different issues. I think EK has made some India nonstops unviable, but other than that I'm not sure what US carriers have backed away from b/c of EK...maybe a DXB nonstop or two.

That is my point exactly -- they haven't needed to as they do not have much natural overlap. But they certainly have pulled back from India (the single largest overlap market) while EK has gained in the US-India market; the pull back and reduced capacity is all the more telling given they have open skies with India and can fly there as much as they want, but they choose not to. Non-stop is not that attractive due to high fuel carrying costs; one stops lose out to EK and its brethren.
 
DLPMMM
Posts: 2276
Joined: Wed Apr 20, 2005 12:34 am

RE: How Can Airlines Compete With EK?

Thu Mar 14, 2013 5:33 pm

The major advantage of EK is that their home government does not hamstring them with excessive taxes and regulations. Combine this with ample access to capital and government provided infrastructure that supports EK's growth and it is not difficult to run a successful airline.
 
MaverickM11
Posts: 17856
Joined: Thu Apr 06, 2000 1:59 pm

RE: How Can Airlines Compete With EK?

Thu Mar 14, 2013 5:40 pm

Quoting DLPMMM (Reply 63):
The major advantage of EK is that their home government does not hamstring them with excessive taxes and regulations. Combine this with ample access to capital and government provided infrastructure that supports EK's growth and it is not difficult to run a successful airline.

   That's pretty much everything you need to know about EK

Quoting sankaps (Reply 62):
Non-stop is not that attractive due to high fuel carrying costs; one stops lose out to EK and its brethren.

True, in fact I'd guess that EK does not make money on its long haul US flights. I'd bet they print money on DEL, for example, and then lose most of it on the longhauls to the US. Net net they come out ahead obviously.
E pur si muove -Galileo
 
sankaps
Posts: 1692
Joined: Fri Jan 04, 2008 6:51 am

RE: How Can Airlines Compete With EK?

Thu Mar 14, 2013 5:44 pm

Quoting DLPMMM (Reply 63):
The major advantage of EK is that their home government does not hamstring them with excessive taxes and regulations. Combine this with ample access to capital and government provided infrastructure that supports EK's growth and it is not difficult to run a successful airline.

That, and also guts and foresight to see a vision and execute on it on a massive scale. Something Gulf Air and others were unable / unwilling to bet on earlier. I still remember many (including me) thinking them crazy when they ordered 90 A380s, regardless of how much capital they had access to -- it looked excessive. Now it looks like a stroke of unimaginable foresight and genius. As Tim Clark stated at an airline awards function last year, looking squarely at the European airline chiefs assembled there: "We've only just started. Wait till all 90 A380s arrive"!
 
sankaps
Posts: 1692
Joined: Fri Jan 04, 2008 6:51 am

RE: How Can Airlines Compete With EK?

Thu Mar 14, 2013 6:14 pm

Quoting MaverickM11 (Reply 64):
True, in fact I'd guess that EK does not make money on its long haul US flights. I'd bet they print money on DEL, for example, and then lose most of it on the longhauls to the US. Net net they come out ahead obviously.

Well, in a network business based on connecting traffic, it is the net-net that matters. "Network contribution" of the US routes must make up for the direct losses (if indeed they are making losses) on the US routes. Conversely, they would not be able to print money on DEL if it were not for their ability to carry DEL pax over the rest of its network.
 
User avatar
lightsaber
Moderator
Posts: 18821
Joined: Wed Jan 19, 2005 10:55 pm

RE: How Can Airlines Compete With EK?

Thu Mar 14, 2013 6:37 pm

Quoting MaverickM11 (Reply 64):
Quoting DLPMMM (Reply 63):
The major advantage of EK is that their home government does not hamstring them with excessive taxes and regulations. Combine this with ample access to capital and government provided infrastructure that supports EK's growth and it is not difficult to run a successful airline.

   That's pretty much everything you need to know about EK

Almost.  


What amazes me is that Dubai is almost broke and yet they still do what they need to do for growth.

Quoting sankaps (Reply 65):
That, and also guts and foresight to see a vision and execute on it on a massive scale. Something Gulf Air and others were unable / unwilling to bet on earlier.

Not only guts, but to do it as a business and execute the plan. EK did this *before* their oil ran low. Dubai had a 'one shot chance' to put themselves on the map and they out-executed at least 5 major competitors. 5 major competitors that had more government financial health but lacked the drive to set up their airlines to 'sink or swim' as a business venture. I find it amusing to see the two airlines that started out with small, utilitarian, and used fleets (EK, QR) are the two in the region to beat...

I agree with what you said, there is just a difference to do it as a business versus a government 'pet project.'

Quoting sankaps (Reply 65):
Now it looks like a stroke of unimaginable foresight and genius. As Tim Clark stated at an airline awards function last year, looking squarely at the European airline chiefs assembled there: "We've only just started. Wait till all 90 A380s arrive"!

What amazes me is I see no reason they couldn't up-gauge to that level of success with far fewer new destinations required than I suspect EK will actually launch.

And we're not ready to start talking about EK at DWC...


Lightsaber
IM messages to mods on warnings and bans will be ignored and nasty ones will result in a ban.
 
cmf
Posts: 3120
Joined: Sun Jun 12, 2011 11:22 pm

RE: How Can Airlines Compete With EK?

Thu Mar 14, 2013 6:57 pm

Quoting MaverickM11 (Reply 54):
Doesn't mean it's self inflicted then...

  

Quoting lightsaber (Reply 67):
What amazes me is that Dubai is almost broke and yet they still do what they need to do for growth.

They really have no other option. Holding back is much worse.
Don’t repeat earlier generations mistakes. Learn history for a better future.
 
PHX787
Posts: 7892
Joined: Thu Mar 15, 2012 7:46 pm

RE: How Can Airlines Compete With EK?

Thu Mar 14, 2013 7:40 pm

Wait a second....


Weren't people on here saying the exact same thing when VS was kicking ass a while ago, like 10 years back?


Maybe it's just a phase...
Follow me on twitter: www.twitter.com/phx787
 
sankaps
Posts: 1692
Joined: Fri Jan 04, 2008 6:51 am

RE: How Can Airlines Compete With EK?

Thu Mar 14, 2013 7:43 pm

Quoting PHX787 (Reply 69):
Weren't people on here saying the exact same thing when VS was kicking ass a while ago, like 10 years back?

VS was kicking ass? They have never been more than a smallish niche carrier. No comparison to EK whatsoever.
 
Gemuser
Posts: 5044
Joined: Mon Nov 24, 2003 12:07 pm

RE: How Can Airlines Compete With EK?

Thu Mar 14, 2013 10:47 pm

Quoting lightsaber (Reply 47):
I could name ten in China alone and another 3 in Indonesia, add Burma, 2nd city in Vietnam, 1 or 2 in Malaysia... There is more growth potential than you suggest. And since GLA was the example, there is still growth in the mid-east/Sub-continent. e.g., the 3 new cities that Pakistan just opened for air travel.

To GLA??? Lightsaber I think you just dropped the ball!!!

Sure there will be markets developed in China, Indonesia, etc, but only about 10%(guess) will develop a market to GLA or any other specified non hub/smaller city, that is worthwhile servicing non stop So there will still be traffic for EK, which was my point.

Gemuser
DC23468910;B72172273373G73873H74374475275376377L77W;A319 320321332333343;BAe146;C402;DHC6;F27;L188;MD80MD85
 
ikramerica
Posts: 15056
Joined: Mon May 23, 2005 9:33 am

RE: How Can Airlines Compete With EK?

Thu Mar 14, 2013 11:06 pm

Quoting YTZ (Thread starter):
By the end of the decade, EK will have a fleet centred on the 359, 351, 388, 77L and 77W. They will have gotten rid of the 332, 333, 343, 345, 77A, 77E and 773. This means EK will have the most modern widebody fleet of any airline. Their CASM will be lower than today, while their planes will also be more comfortable (save maybe the 777s).

EK will be one of a few airlines with a fleet just that modern. SQ, TK, CX, KE, and for the most part, UA and AA. Most aircraft aren't kept over 20 years unless there is no option. By 2020, most airlines will have aircraft delivered after 2000. That's basically your list, + the 787, and modern A330s (not your father's A330).

Quoting mcogator (Reply 52):
I think you're way off on the Southeast Asia bit. Flying from the Eastern US to SE Asia via DXB is roughly the same distance. The average traveler might choose to fly JFK-DXB-BKK on brand new A380's, over JFK-NRT-BKK on older 777s or much older 747s.

So true. As a kid, my sibs and Mom went to Singapore. My Dad had been working there. We flew PanAm EWR-JFK-SFO-HKG-SIN. On the return, we did that in reverse, and my Dad also returned the same day, but he was booked on SQ via Europe.

We left and arrived pretty close to the same time. So close that we were coordinating at EWR to take one shuttle van home! Only hiccup was that while our PanAm helicopter landed without incident, my Dad was on a NYH bird, and a pax freaked out, pulled the emergency door, and the door fell on a car. They had to do an emergency landing back at JFK and send my Dad via car and the guy was arrested.
Of all the things to worry about... the Wookie has no pants.
 
Shenzhen
Posts: 1666
Joined: Wed Jun 25, 2003 12:11 pm

RE: How Can Airlines Compete With EK?

Thu Mar 14, 2013 11:11 pm

Emirates seems eerily similar to PanAm of yesteryear.

Cheers

[Edited 2013-03-14 16:21:39]
 
User avatar
adamh8297
Posts: 3202
Joined: Sat Dec 15, 2012 6:28 pm

RE: How Can Airlines Compete With EK?

Thu Mar 14, 2013 11:29 pm

Quoting Shenzhen (Reply 73):

Pan Am had only one global hub?
Airlines flown: A3, AA, AC, AF, AM, BA, B6, CA, CO, CX, DL, EA, EL, IB, LH, MI, MQ, NH, NW, NZ, OU, PE, QF, S4, SQ, TP, UA, US, VS, WE, WN

2019: CX BOS-HKG, WE HKG-HKT, CA HKT-PEK-EWR, B6 EWR-BOS
 
PHX787
Posts: 7892
Joined: Thu Mar 15, 2012 7:46 pm

RE: How Can Airlines Compete With EK?

Fri Mar 15, 2013 1:26 am

Quoting Shenzhen (Reply 73):
Emirates seems eerily similar to PanAm of yesteryear.
Quoting adamh8297 (Reply 74):
Pan Am had only one global hub?

I think he means in terms of style and reputation.

PA represented America, a rather large country.

EK represents UAE, about the size of South Carolina (I think?)

They don't need multiple hubs there (They already have Abu Dhabi as well for a different airline)
Follow me on twitter: www.twitter.com/phx787
 
sankaps
Posts: 1692
Joined: Fri Jan 04, 2008 6:51 am

RE: How Can Airlines Compete With EK?

Fri Mar 15, 2013 8:34 am

Quoting Shenzhen (Reply 73):
Emirates seems eerily similar to PanAm of yesteryear.

Cheers

In stature and impact, EK is indeed headed down the Pan Am path. But in strategy and network, very different. Pan Am was a US O&D plus fifth freedom carrier. EK is essentially a sixth freedom carrier.
 
1400mph
Posts: 1051
Joined: Wed Jan 16, 2013 11:29 am

RE: How Can Airlines Compete With EK?

Fri Mar 15, 2013 11:10 am

EK is the Usain Bolt of the airline industry.

A few years ago (much as the LCC's did) it entered a market in which its competition consisted of a load of fat, knackered, bloated old relics.
Even airlines like the mighty SQ are being stuffed at their own game.The impact of these carriers is similar in impact to deregulation.

What's happening ?

Hitherto unheard of mergers and consolidation, crash diets and intense training !!

If you look back over time though models and game plans always seem to become outdated, strategies usurped. It happened to Pan Am, TWA and to a certain degree BA on long-haul. It happened to just about every legacy carrier on short-haul.

The world is a changing consolidating place. Rules on ownership etc will become (eventually) more lax.

I think that in the future the secret of success in the airline industry is not to become too big or let yourself remain too small. Both are highly vulnerable to inevitable change. Amble along somewhere in the middle ground able to adapt. Groupings work, alliances work, joint ventures etc work. One humongous carrier with all its eggs in one basket......not so sure !

[Edited 2013-03-15 04:15:19]
 
Bongodog1964
Posts: 3542
Joined: Wed Oct 18, 2006 6:29 am

RE: How Can Airlines Compete With EK?

Fri Mar 15, 2013 12:30 pm

EK's great advantage is its geographical position, based on present passenger activity and plane capability, if you are going to set up a hub anywhere in the world this is likely the place you would do it. It enables passengers to transfer with the minimum of inconvenience.
So how do other airlines compete ?
As passenger numbers increase, and new generation twins such as the 787 and 350 make it possible to fly further on less fuel, they offer point to point services that are quicker than EK, cost the same or little more and avoid the aggro of transferring via a mega hub
 
sankaps
Posts: 1692
Joined: Fri Jan 04, 2008 6:51 am

RE: How Can Airlines Compete With EK?

Fri Mar 15, 2013 12:42 pm

Quoting Bongodog1964 (Reply 78):
As passenger numbers increase, and new generation twins such as the 787 and 350 make it possible to fly further on less fuel, they offer point to point services that are quicker than EK, cost the same or little more and avoid the aggro of transferring via a mega hub

But EK can use these aircraft too to further reduce their costs and thereby retain the cost advantage which they currently enjoy. CASK will go down by 20% for them too.
 
1400mph
Posts: 1051
Joined: Wed Jan 16, 2013 11:29 am

RE: How Can Airlines Compete With EK?

Fri Mar 15, 2013 1:00 pm

Quoting sankaps (Reply 79):
But EK can use these aircraft too to further reduce their costs and thereby retain the cost advantage which they currently enjoy. CASK will go down by 20% for them too.

EK won't start flying relatively small aircraft compared to their current fleet. Their entire business model would collapse if they did that.
 
Bongodog1964
Posts: 3542
Joined: Wed Oct 18, 2006 6:29 am

RE: How Can Airlines Compete With EK?

Fri Mar 15, 2013 1:14 pm

Quoting sankaps (Reply 79):
But EK can use these aircraft too to further reduce their costs and thereby retain the cost advantage which they currently enjoy. CASK will go down by 20% for them too.

They can, however they can't ever find a way of reclaiming the 2 hours minimum it takes to descend, deplane, transfer across the terminal, emplane and take off. Nor can they make flying from A to B via Dubai a straight line when it isn't.

Two differing scenarios:

Western Europe - Eastern Australia - can't be flown without a refuelling stop, nor will it be economic to do so in the forseeable future. EK are situated in an ideal location, the stop has to take place thus there's no comparitive time loss and little if any divesrion off the optimum route

Western Europe - Africa Providing there's sufficient passenger numbers for a 787 or 350, the route can be flown direct with very good economics, even if EK operate the same plane, they have to add the transfer time, the added flight time for the dog leg, and the cost of the extra fuel.

They aren't unbeatable by any means.
 
dtw2hyd
Posts: 7670
Joined: Wed Jan 09, 2013 12:11 pm

RE: How Can Airlines Compete With EK?

Fri Mar 15, 2013 3:18 pm

Quoting Bongodog1964 (Reply 78):
EK's great advantage is its geographical position, based on present passenger activity and plane capability, if you are going to set up a hub anywhere in the world this is likely the place you would do it.

IST may be better hub than DXB. If any airline can beat EK it has to be TK. It has the location advantage, but only if it avoids European Legacy Carrier premium dependent business model.
 
avek00
Posts: 3228
Joined: Mon Oct 25, 2004 5:56 am

RE: How Can Airlines Compete With EK?

Fri Mar 15, 2013 4:00 pm

Quoting Bongodog1964 (Reply 78):
EK's great advantage is

...the fact that its very existence generally makes a mockery of the international commercial aviation regime, which was predicated upon the idea that carriers would be primarily engaged in the transport of people to and from their home countries, with sixth-freedom traffic being of secondary consideration. Most air carriers around the world abide by this principle, even in the present day. The Mideast parasites don't believe the same rules should apply to them, and thus the best thing that many governments most at risk from their invasion can do is restrict their frequencies, destinations, and/or capacity.
Live life to the fullest.
 
FlyPNS1
Posts: 5483
Joined: Wed Dec 01, 1999 7:12 am

RE: How Can Airlines Compete With EK?

Fri Mar 15, 2013 4:12 pm

Quoting avek00 (Reply 83):
international commercial aviation regime, which was predicated upon the idea that carriers would be primarily engaged in the transport of people to and from their home countries, with sixth-freedom traffic being of secondary consideration.

It's called globalization. The world changes. Business changes. Carriers have to adapt.

In the U.S. carriers like DL and AA were once primarily domestic carriers. The "aviation regime" at the time said they should stay that way. But times changed and now DL/AA have large international route networks.

Using your logic, we should tell DL to stop flying internationally because that's not what the regime used to be.
 
sankaps
Posts: 1692
Joined: Fri Jan 04, 2008 6:51 am

RE: How Can Airlines Compete With EK?

Fri Mar 15, 2013 4:47 pm

Quoting avek00 (Reply 83):
its very existence generally makes a mockery of the international commercial aviation regime, which was predicated upon the idea that carriers would be primarily engaged in the transport of people to and from their home countries, with sixth-freedom traffic being of secondary consideration. Most air carriers around the world abide by this principle, even in the present day.

Most carriers follow whatever path leads to profit maximization / loss minimization. Sixth freedom is typically less profitable than carrying traffic direct to/from home countries, which is why airlines have typically not made it their core strategy, especially if they have large home markets. If EK using sixth freedom is somehow an unfair advantage, others are free to follow suit.
 
User avatar
lightsaber
Moderator
Posts: 18821
Joined: Wed Jan 19, 2005 10:55 pm

RE: How Can Airlines Compete With EK?

Fri Mar 15, 2013 5:06 pm

Quoting gemuser (Reply 71):
To GLA??? Lightsaber I think you just dropped the ball!!!

As a non-stop? No. I was talking added EK connections. If each of those cities only adds 5 or so passengers per day, that is another 50 seats/day to GLA. So yes, there is expansion for EK to GLA. And if any one of those cities has a larger demand in the future... It might be enough to push for frequency.

Quoting gemuser (Reply 71):
Sure there will be markets developed in China, Indonesia, etc, but only about 10%(guess) will develop a market to GLA or any other specified non hub/smaller city,

I wasn't talking non-stops to GLA. I was talking EK expanding connection opportunities GLA-DXB-onward. So EK will continue to grow. There will be new non-stops, but GLA wouldn't be my first choice as an example. I would pick DUS, BER, MAN, or another larger European 'secondary city.'

Quoting DTW2HYD (Reply 82):
If any airline can beat EK it has to be TK. I

That I concur with. In particular as TK will have a new hub airport 5 to 7 years before EK. With a larger O&D base from IST (and the new-IST) than DXB, I expect EK is looking at TK often...

Lightsaber
IM messages to mods on warnings and bans will be ignored and nasty ones will result in a ban.
 
Bongodog1964
Posts: 3542
Joined: Wed Oct 18, 2006 6:29 am

RE: How Can Airlines Compete With EK?

Fri Mar 15, 2013 5:18 pm

Quoting avek00 (Reply 83):
...the fact that its very existence generally makes a mockery of the international commercial aviation regime, which was predicated upon the idea that carriers would be primarily engaged in the transport of people to and from their home countries, with sixth-freedom traffic being of secondary consideration. Most air carriers around the world abide by this principle, even in the present day. The Mideast parasites don't believe the same rules should apply to them, and thus the best thing that many governments most at risk from their invasion can do is restrict their frequencies, destinations, and/or capacity.

The regime you yearn back to was in fact a version of the old gentlemans club "you scratch my back and I'll scratch yours" game.
Both nations flag carriers sat down predicted demand, then asked for permission for enough flights to nearly meet the demand, only nearly, as a shortage of seats helped to keep prices high. Then they both charged exactly the same prices.

Why shouldn't the flying public have a choice of reasonable priced routes from a number of airlines ?
 
avek00
Posts: 3228
Joined: Mon Oct 25, 2004 5:56 am

RE: How Can Airlines Compete With EK?

Fri Mar 15, 2013 5:42 pm

Quoting FlyPNS1 (Reply 84):
Using your logic, we should tell DL to stop flying internationally because that's not what the regime used to be.

Not at all. The global commercial aviation regime can, should, and does welcome all players who are primarily engaged in transporting people to and from its home country, as is the case with Delta.

Mind you, if the underlying presumption of primarily transporting pax to/from the home market did not exist and generally hold true for all these years, we would have FAR FEWER international flights to choose from today.



Quoting sankaps (Reply 85):
Most carriers follow whatever path leads to profit maximization / loss minimization.

As they should. The rise of Emirates (and similar Mideast parasitic carriers) is, at core, not so much a failure of other airlines but rather a failure of *governments* to limit the potential harm caused by the parasites' abuse of sixth freedom flying.
Live life to the fullest.
 
sankaps
Posts: 1692
Joined: Fri Jan 04, 2008 6:51 am

RE: How Can Airlines Compete With EK?

Fri Mar 15, 2013 6:14 pm

Quoting avek00 (Reply 88):
Not at all. The global commercial aviation regime can, should, and does welcome all players who are primarily engaged in transporting people to and from its home country, as is the case with Delta.

So Coke and Boeing should stay primarily in the US and not look for growth in other markets, Nestle should stay in Switzerland, Kraft in Australia, Sony in Japan, and Samsung in Korea. Home markets.

Except that is not how free markets and globalization works.

Quoting avek00 (Reply 88):
As they should. The rise of Emirates (and similar Mideast parasitic carriers) is, at core, not so much a failure of other airlines but rather a failure of *governments* to limit the potential harm caused by the parasites' abuse of sixth freedom flying.

Ah, would be so good to be back in the protectionist 1890s... heck with free markets and competition.
 
mcogator
Posts: 538
Joined: Thu Jul 26, 2007 11:51 am

RE: How Can Airlines Compete With EK?

Fri Mar 15, 2013 7:54 pm

Quoting avek00 (Reply 88):
Not at all. The global commercial aviation regime can, should, and does welcome all players who are primarily engaged in transporting people to and from its home country, as is the case with Delta.

If only DL didn't have a damn hub in NRT.....and I guess CDG and AMS to a lesser extent.
“Traveling – it leaves you speechless, then turns you into a storyteller.” – Ibn Battuta
 
sankaps
Posts: 1692
Joined: Fri Jan 04, 2008 6:51 am

RE: How Can Airlines Compete With EK?

Fri Mar 15, 2013 8:22 pm

Quoting mcogator (Reply 90):

To be fair, Delta uses the hubs as scissor hubs targeted at distributing pax heading to and from the US.
 
hohd
Posts: 809
Joined: Sat May 17, 2008 1:03 am

RE: How Can Airlines Compete With EK?

Fri Mar 15, 2013 8:42 pm

US Carriers with significant international service have started by discontinuing frequent flyer arrangements and code shares. Interlining is still there, but may be the US carriers charge more for the local connection flight, but for many even that is better than buying a ticket on US carriers. Some even drive to the EK served airports- Vancouver/Portland to Seattle or Austin/San Antonio to IAH and way more in East Coast to avoid the high prices of the local connections.

They are also getting cozy with QR and EY to combat EK (especially oneworld and may be skyteam, star is still against all middle east carriers), they think that these carriers are not that much of a threat,

But the real problems lie with Indian and SE Asian carriers, they are threatened and in the short term there is no way out.
 
User avatar
lightsaber
Moderator
Posts: 18821
Joined: Wed Jan 19, 2005 10:55 pm

RE: How Can Airlines Compete With EK?

Fri Mar 15, 2013 9:08 pm

Quoting Bongodog1964 (Reply 87):
Why shouldn't the flying public have a choice of reasonable priced routes from a number of airlines ?

Because its just not cricket ol' chap.  


Lightsaber
IM messages to mods on warnings and bans will be ignored and nasty ones will result in a ban.
 
Aither
Posts: 1210
Joined: Mon Oct 25, 2004 3:43 am

RE: How Can Airlines Compete With EK?

Fri Mar 15, 2013 10:07 pm

Quoting sankaps (Reply 50):
Connections are down because BA realized it is far more profitable to use its finite slots to focus on *much* higher yield London O&D than connections. London is the most premium, highhest yielding O&D market **in the world**. Why would anyone want to stimulate lower-yielding connections unless they had excess capacity or spare slots to fill?

By focusing on a per route profitability and not looking at the bigger picture (network, competition...) BA has

- Allowed a competitors to become strong
- Prevent itself of opening new routes & diversify its market
- Reduced their economy of scale and influence to negociate whatever traffic rights
- And is finally losing its high yields pax because the high yield pax are also the low yield pax

The success of EK is just the result of short sighted profit maximisation advices given to European airlines by shareholders, consultants and losy network models that focus only on a small part of the story that makes an airline succesfull or not.
Never trust the obvious
 
Viscount724
Posts: 19316
Joined: Thu Oct 12, 2006 7:32 pm

RE: How Can Airlines Compete With EK?

Fri Mar 15, 2013 10:32 pm

Quoting avek00 (Reply 83):
Quoting Bongodog1964 (Reply 78):
EK's great advantage is

...the fact that its very existence generally makes a mockery of the international commercial aviation regime, which was predicated upon the idea that carriers would be primarily engaged in the transport of people to and from their home countries, with sixth-freedom traffic being of secondary consideration. Most air carriers around the world abide by this principle, even in the present day.

KLM has never abided by that principle. Sixth-freedom traffic has always been a very high priority and accounts for the majority of their traffic. That's true for many other carriers based in even smaller countries such as LX.

Quoting Shenzhen (Reply 73):
Emirates seems eerily similar to PanAm of yesteryear.

Not at all. You could connect between 2 Pan Am flights at many cities apart from their major hubs at JFK and MIA and a smaller hub at FRA. There were many other possibilities of PA to PA connections at NRT/LHR/CDG/FCO/HKG/LAX/SFO, among others. For example, I once flew Pan Am LHR-LAX and connected to another Pan Am flight LAX-HNL.

On EK you can only connect to another EK flight at DXB.
 
FlyPNS1
Posts: 5483
Joined: Wed Dec 01, 1999 7:12 am

RE: How Can Airlines Compete With EK?

Fri Mar 15, 2013 11:08 pm

Quoting avek00 (Reply 88):
The rise of Emirates (and similar Mideast parasitic carriers) is, at core, not so much a failure of other airlines but rather a failure of *governments* to limit the potential harm caused by the parasites' abuse of sixth freedom flying.

Should we shut down BA too? While they have a decent amount of O&D, they carry a substantial amount of connecting traffic too. The same is true for AF and LH.

How is sixth freedom flying an abuse anyway? What's abusive about it?

And what about all the market pairs that simply won't work without a connection through some other non native hub? For American's, many Middle Eastern, Eastern European, African and Indian markets aren't reachable flying their home carriers, so what are they to do?

Quoting avek00 (Reply 88):
Mind you, if the underlying presumption of primarily transporting pax to/from the home market did not exist and generally hold true for all these years, we would have FAR FEWER international flights to choose from today.

That's not even remotely true. We have far more international flights today exactly because carriers have risen up to carry new traffic flows. Without all that flow, many European/Asian/Middle Eastern carriers would have far fewer flights to the U.S.
 
avek00
Posts: 3228
Joined: Mon Oct 25, 2004 5:56 am

RE: How Can Airlines Compete With EK?

Fri Mar 15, 2013 11:43 pm

Quoting sankaps (Reply 89):
So Coke and Boeing should stay primarily in the US and not look for growth in other markets, Nestle should stay in Switzerland, Kraft in Australia, Sony in Japan, and Samsung in Korea. Home markets.

Except that is not how free markets and globalization works.


International commercial aviation was NEVER intended to be a truly "free" market, and for reasons too lengthy to detail here, it will never be a truly free market in our lifetimes. In international commercial aviation, there are a multitude of policy and interest considerations that can, do, and must take precedence over the unfettered ability to make a profit, and that hasn't changed. So comparisons to industries outside of aviation (such as the beverage industry) often struggle for relevance.

[Edited 2013-03-15 16:46:57]
Live life to the fullest.
 
avek00
Posts: 3228
Joined: Mon Oct 25, 2004 5:56 am

RE: How Can Airlines Compete With EK?

Fri Mar 15, 2013 11:59 pm

Quoting FlyPNS1 (Reply 96):
Should we shut down BA too? While they have a decent amount of O&D, they carry a substantial amount of connecting traffic too. The same is true for AF and LH.

BA, AF, and LH all carry, on an aggregated basis, a majority of their international traffic to or from their home markets, just as their American, Canadian, Japanese, and Australian legacy peers do. Sure, the EU legacies carry all sorts of Sixth Freedom traffic, and there's nothing wrong with chasing that gravy because the "meat and potatoes" follows the letter and spirit of the international air service regime.

KLM is a special case for the USA, but true to the principle that international civil aviation is governed by a combination of interests, we allow them to do what they do without complaint because it suits US foreign policy interests, and because the Open Skies grant was closely linked with an ATI arrangement that hugely benefitted a struggling major US airline at the time (Northwest).
Live life to the fullest.
 
FlyPNS1
Posts: 5483
Joined: Wed Dec 01, 1999 7:12 am

RE: How Can Airlines Compete With EK?

Sat Mar 16, 2013 12:09 am

Quoting avek00 (Reply 97):
International commercial aviation was NEVER intended to be a truly "free" market,

That's your opinion, but not fact. You are living in the past. If anything, by it's inherently mobile nature, international aviation has the most potential when allowed to be free.

Quoting avek00 (Reply 97):
In international commercial aviation, there are a multitude of policy and interest considerations that can, do, and must take precedence over the unfettered ability to make a profit

Not really. If that was true EK wouldn't exist. Even restricted markets like Brazil and China are opening up. Again, you are living in the past.

Quoting avek00 (Reply 98):
KLM is a special case for the USA, but true to the principle that international civil aviation is governed by a combination of interests, we allow them to do what they do without complaint because it suits US foreign policy interests

What a load of garbage. The U.S. has little in foreign policy interest in the Netherlands.

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos