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flyenthu
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ME3 And Legacy Airlines

Thu Jun 12, 2014 3:14 am

Hi A. Netters:

http://www.businessweek.com/articles...lines-cuts-into-lufthansas-profits

This article is perhaps stating the obvious, yet, it puzzles me why legacy European airlines (LH, BA, AF) are not being sufficiently competitive and aggressive-especially, when it comes to traffic to the Indian subcontinent and far east Asia? It seems like they are either just giving up on these huge markets that they used to dominate. I remember, when BA used to be largest foreign carrier in India, and that too not very long ago before EK overwhelmed the subcontinent skies in a good way. BTW, I love flying with the ME3, no complaints there; but can't help wonder why the European airliners are not being more aggressive.

Flyenthu
 
jumpjets
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 6:25 am

Quoting flyenthu (Thread starter):
It seems like they are either just giving up on these huge markets that they used to dominate

I am not so sure that is a fair reflection of the response of the legacy carriers. For example BA in recent years has added daily services to HYD and BLR and expanding services to MAA BOM and DEL, whilst dropping its services to CCU. SO not a huge increase as compared to the ME3 but nevertheless hardly giving up on the market.
 
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seahawk
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 6:34 am

Because they can not win against the ME3. Their hubs are geographically less well placed, their workforce is too expensive, their service level is bad.
 
pa747sp
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 6:42 am

Quoting seahawk (Reply 2):
heir hubs are geographically less well placed, their workforce is too expensive, their service level is bad.

Exactly. The third point follows from the first two. Geography allows a huge range of connection options, lower costs allow greater levels of service. A customer considering a journey from HYD to LYS for instance can take one stop through DXB and arrive earlier and at a lower cost than flying one of the European legacy carriers via their European hubs. That EK might offer better levels of service is the sweetener that will clinch the sale.
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PanHAM
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 9:36 am

We had this many time sbefore. i challenge the "Service" aspect, how can an carrier that squeezes over 450 People into a 77W have a better Service than a carrier that does not put that many into a 744?

Of course it is difficult to compete against carriers that have far less Labor costs than the ME3. EK EY and QR pay more or less tax free income which means, they do not have to earn the taxes from their customers. A net income of € 2000 is that much, may be some addtional for health coverage. A similar net income in Germany will cost the employer at least twice as much, usually more. .

That cannot be compensated by productivity either, as is done in many other industries like manufacturing. The Crew numbers are mandatory and usually the same regardless which Country the carrier is based. This example Shows that the european carriers are fighting an uphill battle, and i do not speak about curfews and other high costs in a civilisation that is ruled by the law and not by decret.

Now, when you look at the annual Profit EK return, one cannot be too impressed, actually that should be far greater.
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AyostoLeon
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 10:04 am

Quoting PanHAM (Reply 4):

I am not batting for one or the other, but "service" includes many things.

The meals can be better or worse, the airline reward programme might be more or less generous, reward flights and upgrades might be easier or harder to obtain, there may be more generous baggage allowances., to name just a few examples.

These are aspects that go beyond the simple number of seats on an aircraft type, though I admit to not being a fan of 10x in Y or 7x in J.
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PanHAM
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 11:12 am

The "Service" means that you are transported between Point A and Point B, making a stop at DXB although a non stop flight to your final is available, you will be already trading service for inconvenience. .

Upgrades are frills, if you want to eat go to a Restaurant, it will always be better. Drinks are rationed. Which is OK, water only is better anyhow. There are People who are glad that they can have 10 hours without some electronic pacifier, unfortunately chances that a vidiot is sitting next to you are rather high.

Same as baggage allowances. If you are a Status customer, it is frills again. If not, why should you pay the same with 2 pieces of luggage while another Pax has only a carry-on?

We agree on the seating and it makes me always wonder why a carrier that squeezes that many People in a 3 class 77W gets so much better Ratings than LH who does not.
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ElPistolero
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 12:18 pm

Quoting PanHAM (Reply 4):
We had this many time sbefore. i challenge the "Service" aspect, how can an carrier that squeezes over 450 People into a 77W have a better Service than a carrier that does not put that many into a 744?

The seat no. has to be seen I'm the context of how tightly they are packed together. Having a larger number of J seats with Y packed in at 31" still makes the Y class product as bad, if not worse than a seat with 32"-34" pitch. The reality is that Euro legacies in particular have been guilty of cramming and neglecting pax in Y for years. It is worth remembering that the EKs initial success was built on a better than average Y paired with a poor J. LH and BA on the other hand focused on J pax at the expense of Y.

It was an odd strategy and LH is feeling it now with its premium heavy aircraft. As I ve noted, how long did it take LH to get PTVs relative to EK. EK may not have the best Y, but its successfully convinced the public that its better than most. And it probably is.

Quoting PanHAM (Reply 6):
The "Service" means that you are transported between Point A and Point B, making a stop at DXB although a non stop flight to your final is available, you will be already trading service for inconvenience. .

Its a choice. In your analogy, people are choosing an indirect flight over a direct one, which leads one to surmise that some people value some aspects of service more than others (nonstop, for example), as is their prerogative. Its up to the airlines to sway them to their product. If they can't, their product is obviously lacking. For instance, I wouldn't be caught dead on AC Rouge to BCN. I'd sooner fly a proper airline and connect somewhere in Europe.

Quoting PanHAM (Reply 6):

We agree on the seating and it makes me always wonder why a carrier that squeezes that many People in a 3 class 77W gets so much better Ratings than LH who does not.

IFE? Catering? Sleeping in Y is generally impossible, especially with 31" pitch. Keep people entertained and well fed - that's EKs motto, no? Contrast that to LH flying PTV-less 31" pitch (and this was before the slimline nonsense came along) to India. I flew those. I've been back on LH all of once since then - on an EU flight to/from FRA. On long haul? No thank you - better value for money on other carriers.

Quoting PanHAM (Reply 6):
If you are a Status customer, it is frills again.

Another LH mistake was never fostering loyalty among the Y crowd. Now it's bleeding them to other airlines.
 
ytz
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 12:27 pm

Today's Y is tomorrow's J pax. Especially true in fast growing economies. The legacies forget that.

I've seen so many family and friends be sincerely resentful about flying LH to India for their ratty old birds from FRA. Don't expect loyalty to build with that kind of service. LH doesn't care about the Indian market. Why would they expect loyalty from Indian travellers?
 
dtw2hyd
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 12:43 pm

Both have different revenue models. Legacies depend "only" on premium pax neglecting economy. ME3 figured out make money with economy pax.

In summary:
Legacy: Premium pax covers the cost, cargo brings profits, economy pax are necessary evil.
ME3: Economy pax covers the cost, rake profits with premium, rake more profits with cargo.

Trouble is paid economy pax is a growing segment and most premium pax are upgrades or business travel. By labeling a major market segment as "necessary evil" Legacies rolled red-carpet to ME3.

Things are changing though. LH/SQ/AC all realized and at-least appear to accommodate economy pax from third world countries. Not sure if they are doing whole heartedly. I think this is the last chance they have.

I always wondered which $Million consulting firm told legacies to run premium heavy fleet on low-yield routes. They should ask for a refund.
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Planesmart
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 12:59 pm

Quoting dtw2hyd (Reply 9):
I always wondered which $Million consulting firm told legacies to run premium heavy fleet on low-yield routes. They should ask for a refund.

Always recommend what the client isn't currently doing (even if they were doing it three years ago before the last consultants came through).

Joking aside, a big problem for legacies is CEO's and senior management stuck in their ways. A CEO is going, and the replacement has been groomed by the airline or another legacy. You get more of the same.

Of course, after a few decades, even new starts fall into the legacy group.
 
ytz
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 1:14 pm

Quoting dtw2hyd (Reply 9):
LH/SQ/AC all realized and at-least appear to accommodate economy pax from third world countries.

You're kidding right? AC intends to go high density on all their 77Ws. 66pax per toilet. And that comes with 17" seats and 31" pitch. Few years of this and they won't have to worry about fleet expansion. Nobody in the diaspora will take their feeder to FRA. It'll be interesting to see if the Chinese will flock to this for long haul to PVG, PEK and HKG.

Different business models is right. Exactly, why I wonder they keep complaining about the ME3. They never cared about the hoarded of Y pax that the ME3 haul. Guess, they never thought the ME3 would actually grow a following.
 
PanHAM
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 1:22 pm

Quoting dtw2hyd (Reply 9):
Both have different revenue models. Legacies depend "only" on premium pax neglecting economy. ME3 figured out make money with economy pax.

To figure out that more Money can be made by squeezing more passengers into the same room should win the nobel prize for economics. Who could have thought of nthat?

The Thesis that "legacies depend only on premium pax " is BS. The legacies have advertise their Y producst as well as the J product. There are incentives meanwhile in all 3 classes.

Fact is, the ME3 as well as TK have a far better cost base than the legacies and that is NOT due to "cheaper fuel" but cheaper over all Labor costs and government Sponsoring.

Quoting planesmart (Reply 10):
Always recommend what the client isn't currently doing (even if they were doing it three years ago before the last consultants came through).

read my post # 4
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jfk777
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 1:40 pm

Quoting PanHAM (Reply 12):
Fact is, the ME3 as well as TK have a far better cost base than the legacies and that is NOT due to "cheaper fuel" but cheaper over all Labor costs and government Sponsoring.

Much of the success of the ME3 is that the older airlines in the ME like Saudia and Kuwait seem happy serving their small countries. Another part is the lack of quality airlines in that part of the world, India is for Emirates like Florida is for Delta to Atlanta.


The ME 3 have copied Cathay and Singapore qualities and provided a way to get to Asia for people in Latin America and Africa that didn't need to deal with EU and US visas. They have redrawn the world's airline rote maps.
 
dtw2hyd
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 1:54 pm

Quoting PanHAM (Reply 12):
The Thesis that "legacies depend only on premium pax " is BS. The legacies have advertise their Y producst as well as the J product. There are incentives meanwhile in all 3 classes.

If this is true they shouldn't be cancelling routes with lame low-yield excuse. Most of these routes had solid load factors in 'Y' for years.

ME3 do not offer cheap tickets forever, they offer long enough so legacies fold their ops.

Below are couple of examples. Even though they had sub-par product, people prefer to use known reliable airlines. Both had solid Y loads. Average pax always surprised by the airline statements about poor loads. They say "That flight was always full, why LH cancelled that flight". Can't KLM operate a raggedy MD-11 to make money with full Y load.

Quote:
A statement by the Dutch carrier said it was "suspending the service in response to financial results of this route and local market developments."
http://buyingbusinesstravel.com/news...4426-klm-suspend-hyderabad-service

Quote:
Lufthansa, effective Winter 2011/12 will be terminating service to Hyderabad, HYD. The German carrier presently operates thrice weekly Frankfurt – Hyderabad flights. Poor loads are believed to be the reason for the cancellation. There is only very little O&D traffic between Hyderabad and Germany, and LH’s flights were almost entirely dependent on connecting traffic.
http://www.flightglobal.com/blogs/th...ufthansa-to-end-hyderabad-service/

Interestingly Hyderabad is Lufthansa's cargo hub!!!
All posts are just opinions.
 
tommy1808
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 2:01 pm

Quoting ytz (Reply 11):
Exactly, why I wonder they keep complaining about the ME3.

Because the ME3 are heavily subsidized by there nation states.

best regards
Thomas
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6
 
ytz
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 2:02 pm

Quoting PanHAM (Reply 12):
Fact is, the ME3 as well as TK have a far better cost base than the legacies and that is NOT due to "cheaper fuel" but cheaper over all Labor costs and government Sponsoring.

Riiiiiiiighhhhhttt.....

And higher aircraft utilization and a higher proportion of widebodies for the ME3 has nothing to do with their competitiveness. You don't think LH's costs would come down a ton if FRA was a 24/7 operation?

Quoting PanHAM (Reply 12):

To figure out that more Money can be made by squeezing more passengers into the same room should win the nobel prize for economics. Who could have thought of nthat?

Who's doing the squeezing? From 2015 onwards, if I want to go from AC to FRA or more comfortable A380 to DXB. Which one do you think most Y pax are going to pick? Sure, EK has high density birds. But none are 31" seat pitch. And you are only on those high density birds for a few hours to India from Dubai. The bulk of your travel is on a comparatively luxurious A380.

And that's not even looking at catering. I flew Y+ on AC to Paris and on TK to IST. The difference in catering for this supposedly premium economy is night and day. Meanwhile, AC's Y+ fare to CDG is nearly the same as TK's Y+fare to IST, a flight that's 3 hrs longer.

And IFE is only now catching up....most of the diaspora who were compelled to take LH for whatever reason (AC/UA partner, points, etc.) have not forgotten the transit bus style service on the LH 747s from FRA with the ceiling mounted CRTs. On one trip two years back to BOM, while flying TK Y+, a seat mate from IST, told me that he always picks TK specifically because he wants to avoid the horrible trip on LH from FRA to DEL....he's rather spend the night in BOM with friends and fly local to DEL in the morning. He was a college student. Imagine, what happens what decisions that college student will make when he takes over his father's engineering consultancy.

Quoting PanHAM (Reply 12):
The Thesis that "legacies depend only on premium pax " is BS. The legacies have advertise their Y producst as well as the J product. There are incentives meanwhile in all 3 classes.

Sure they advertise all the classes. But they don't actually deliver competitive services. And that's the crux of the problem. Diasporic travelers have long accepted that they'll have to transfer somewhere. They know that direct flights will be rare and expensive. Hence, they look for the most bang for the buck.

If you travel the ME3, you have a greater choice of one-stop destinations (especially on the same carrier...service consistency), you have better onboard service (legroom, catering, IFE), more convenient connection timings (even if it's 3am in the morning....nobody wants to be waiting around an airport for too long) and nicer connection facilities while waiting. This is why, even though EK is legally barred from undercutting LH, Lufthansa still loses pax to EK in Germany. Price is not the only thing that matters, despite what the legacies think about Y-pax mentality.

[Edited 2014-06-12 07:10:21]
 
ytz
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 2:05 pm

Quoting tommy1808 (Reply 15):
Because the ME3 are heavily subsidized by there nation states.

Where's the proof? Internet wisdom doesn't count.

And you can't club all the airlines together....QR and EY maybe.

EK? Not so much. Indeed, EK is probably one of the few operations that kept the Emirate of Dubai afloat during their financial crisis.

And where's the proof that publicly traded TK is subsidized? And you know, more than the ME3, that's the one that the eurolegacies should be watching out for....

[Edited 2014-06-12 07:12:12]
 
tommy1808
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 2:10 pm

Quoting ytz (Reply 17):

Where's the proof? Internet wisdom doesn't count.

and if i tell you 2+2=4 you will also be asking me for proof?

You are saying that Airlines in the UAE pay taxes?

best regards
Thomas
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6
 
PanHAM
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 2:17 pm

Quoting ytz (Reply 16):
You don't think LH's costs would come down a ton if FRA was a 24/7 operation?

yes, read my contributions of today, I said that the legisslative here puts a lot of stumbling Stones in the airline's ways . The curfew is definately one of them.
Still, LH achieves fairly good utilisation on their Long haul aircraft. That was discusses when the first 744 was scrapped. But the curfew affects short haul more than it does l/h, the L/h schedules have been moved Forward a bit
Which affects connectivity.

[

Quoting ytz (Reply 16):
Who's doing the squeezing? From 2015 onwards, if I want to go from AC to FRA or

I scratched AC off my carrier list a Long time ago. Last time I flew them was end ogf the 90s in J and was not too impressed. It was more or less the old F class I knew from the 70s. IIRC
Was Erlauben Erdogan!!!
 
ytz
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 2:19 pm

Since when does low or no taxes = subsidy?

If that's the case, is Apple subsidised for registering in Ireland?

And that's not an argument when b there's no exclusivity. LH could move head office to UAE and avoid taxes too. What's your point?
 
tommy1808
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 2:28 pm

Quoting ytz (Reply 20):
Since when does low or no taxes = subsidy?

no taxes are government subsidy since... ever? Well, pretty much...

Quoting ytz (Reply 20):
If that's the case, is Apple subsidised for registering in Ireland?

Since everyone is doing it and everyone can do it, at least the competition is not complaining. Nation States however just started looking into it....

Quoting ytz (Reply 20):
And that's not an argument when b there's no exclusivity. LH could move head office to UAE and avoid taxes too

nope, they can´t.

best regards
Thomas
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6
 
DTWPurserBoy
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 2:40 pm

Labor costs for the ME3 are hard to figure. Pilots and flight attendants work under a term contract, housing is provided as is transportation to and from the airport. I have several friends that have gone to EK and working in f/a training and management as well as pursers. Their salaries are very competitive with US legacy carriers, EK provides full in-house health and dental care and several free passes a year for home visits. There are numerous tax advantages as well. Despite this, most last a few years and come home. The American women are generally NOT happy as their rules are stifling and rigourously enforced and most leave after a year or less. The cultural divide is hard to take.

Check out EK's website--they frequently recruit here in the US and it will list the cities where they will be holding interviews.
Qualified on Concorde/B707/B720/B727/B737/B747/B757/B767/B777/DC-8/DC-9/DC-10/A319/A320/A330/MD-88-90
 
dtw2hyd
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 2:48 pm

Quoting ytz (Reply 16):
Who's doing the squeezing? From 2015 onwards, if I want to go from AC to FRA or more comfortable A380 to DXB. Which one do you think most Y pax are going to pick? Sure, EK has high density birds. But none are 31" seat pitch. And you are only on those high density birds for a few hours to India from Dubai. The bulk of your travel is on a comparatively luxurious A380.

Granted AC taking its Y bit too far on cozy side, but what options it has to compete with ME3. You have to appreciate AC for trying. As zeke posted somewhere, premium seats are taking way too much space leaving very little room for economy.

BTW, did AC tell Boeing, give us whatever Jetstar is having on our B787s. I was surprised to see AC opted cheapest/lightest( 3lb per seat) IFE in the market.
All posts are just opinions.
 
ytz
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 2:51 pm

Quoting PanHAM (Reply 19):
Still, LH achieves fairly good utilisation on their Long haul aircraft.

Good utilization still does not equal the 18 hrs per day that EK achieves. That's reality.

Quoting PanHAM (Reply 19):
yes, read my contributions of today, I said that the legisslative here puts a lot of stumbling Stones in the airline's ways

And you don't blame own goals on the other team.

Quoting PanHAM (Reply 19):
I scratched AC off my carrier list a Long time ago. Last time I flew them was end ogf the 90s in J and was not too impressed.

Unfortunately for LH, a lot of their TATL feed is UA and AC, and those service levels determine whether the diaspora here chooses to fly LH from FRA onwards. In the past, LH's old 747s didn't help. And going forward, AC's decision all but hands the Y market to South and Southeast Asia to the ME3.

In certain markets like AC service to FRA on a monopoly or I take a bus 1.5 hours and go from YUL on QR. If you've got the extra 1.5 hrs, which would you choose? Oh and in that case, AF, KLM, LH, and LX all bus their pax to YUL from the train station in Quoting tommy1808 (Reply 21):
no taxes are government subsidy since... ever? Well, pretty much...

Ummm. No. And certainly not by WTO definition. You can only count them as subsidy, if they are sector or company specific exemptions. The UAE's no tax policy applies across the board. They are not specific to the aviation sector or specific to companies like EK. You might as well complain about low taxes in Hong Kong or Singapore. It's the same thing.

Quoting tommy1808 (Reply 21):
Since everyone is doing it and everyone can do it, at least the competition is not complaining. Nation States however just started looking into it....

The EU can whine all they want. But there is no international treaty that mandates uniform tax rates across the board. And certainly no obligation for any company to follow the EU's higher tax rate regime. They don't get to label every lower tax regime as a subsidy just because the EU chooses to have some of the highest tax rates in the world. This is quite similar to EU's carbon tax policy and attempt to tax airlines ultra vires.

Quoting tommy1808 (Reply 21):
nope, they can´t.

Well then that's their problem. Not the UAE's. The point stands. Any company can move to the UAE and benefit from their tax regime. So the practice is not discriminatory. Or a "subsidy".

Quoting dtw2hyd (Reply 14):
If this is true they shouldn't be cancelling routes with lame low-yield excuse. Most of these routes had solid load factors in 'Y' for years.

This. For all the complaints, the biggest problem with the legacies is just that they don't fly to enough places. So LH cancels service to HYD. How can they then complain about the ME3 gaining traction. Effectively, many people who would choose LH to fly to HYD now face a three stop and service with another carrier.

I don't blame the eurolegacies for the choice they make. They are profit driven organizations seeking to maximize returns for shareholders. But they shouldn't blame competitors, when they're choice fail to foster relationship in the long term growth markets they want to pursue. Instead of trying to accuse the ME3 of everything under the sun, how about you actually compete for my business for once?

[Edited 2014-06-12 07:52:33]
 
ytz
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 2:58 pm

Quoting dtw2hyd (Reply 23):
Granted AC taking its Y bit too far on cozy side, but what options it has to compete with ME3.

But it's not just competing with the ME3. What competition is there to China with the ME3? Mind you, now that they've made it so uncomfortable, maybe some pax will choose to fly to China via the Middle East!

The argument always is that Y pax only book according to fair and they don't care about anything else, therefore they deserve to treated like cattle. We're about to find out in the next few years how true this is. AC can now use high density on TATL to combine with LH and offer cheaper fares to India. Let see if they put a dent in the ME3+TK's business in Canada. I doubt they will. But we now have a genuine experiment to see if their assertions are right.
 
PanHAM
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 3:51 pm

Quoting ytz (Reply 20):

And that's not an argument when b there's no exclusivity. LH could move head office to UAE and avoid taxes too. What's your point?

LH could not do that at all. They would lose all their traffic rights from the EU, would be a thoird Country carrier. LH Needs the base in Germany.

And do not compare apples and androids or Amazons and Starbucks. They are in a completely different Business. The EU will pretty soon take the carpet from under their feet and make them pay more taxes.
The trick is that the HQ is based in ireland, but the real trick is that the brand names are registered in the Netherlands and the Dutch Company takes royalties for the use of the brand names and theses royalties are tax free in the Netherlands.

Now, back to aviation. LH is getting lcose to 18 hours utilisation for the l/h fleet. The real Advantage of EK is that they have almost not short haul Feeders.

Now, Taxation. I wrote it quite clear, in order to pay someone € 2000,00 net, EK may have total costs including housing and health benefits (the free passes do not cost them) of, OK I'll be generous, € 3000.
LH's costs are somewhere at € 5000,00, which means for an employee making 2K net, LH Needs exactly €2K more turnover than EK.

I do not call this a subsidy, but it is a cost advantage which is by rulers decret.
Was Erlauben Erdogan!!!
 
flyenthu
Topic Author
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 4:02 pm

Anecdotally, I have heard from friends to the subcontinent, that they like Europe layover because the duration of flight from US is just right (about 8-10 hours) and then another 9 hours to India. Middle east flights to the US are much longer with longer layovers. However, many state that they prefer the service and entertainment choices of the ME3 airlines. Regarding cabin crew, the complaints are no different for legacy European and ME3...so that is not a huge differentiating factor. I think food, entertainment, small touches like mood lighting, starlit ceiling (hmmm!), cameras, galley snacks, hot towel service, charger stations, cumulatively adds up to the attractiveness. Not one thing, but an aggregated effect.
 
tommy1808
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 4:07 pm

Quoting PanHAM (Reply 27):
LH could not do that at all. They would lose all their traffic rights from the EU, would be a thoird Country carrier. LH Needs the base in Germany.

More importantly, even if LH could legally move to the UAE and keep all traffic rights, the business would still be in Germany and hence taxes would have still have to be paid in Germany. They would basically just save a tiny bit on their HQ staff.

best regards
Thomas
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6
 
ytz
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RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 4:45 pm

Quoting PanHAM (Reply 27):
And do not compare apples and androids or Amazons and Starbucks. They are in a completely different Business.

Where we are discussing taxes, particularly in the sense that these are tax rates applied to all coporations and employees (note that EK does not get special treatment on taxes in the UAE....it's not an exception), then this discussion is entirely relevant.

Quoting PanHAM (Reply 27):
LH Needs the base in Germany

They could easily base some employees in the UAE. However, that has implications on staff morale and some sense of ethics and nationalism for the "flag carrier". I get that.

Quoting PanHAM (Reply 27):
Now, Taxation. I wrote it quite clear, in order to pay someone € 2000,00 net, EK may have total costs including housing and health benefits (the free passes do not cost them) of, OK I'll be generous, € 3000.
LH's costs are somewhere at € 5000,00, which means for an employee making 2K net, LH Needs exactly €2K more turnover than EK.
Quoting PanHAM (Reply 27):
I do not call this a subsidy, but it is a cost advantage which is by rulers decret.

This is utter nonsense. The US, Canada, Mexico, Singapore, Australia, all of Southeast Asia, etc. has lower payroll taxes than Europe. Are companies being subsidized over there?

And what is "ruler's decree"? How is this any different than a government issuing legislation? You understand that government's have sovereign rights to impose (or refrain from imposing) taxes on citizens and residents in their jurisdictions? This "ruler's decree" is not any different than any other government ordering a taxation regime for citizens and companies in their jurisdiction.

If your issue is a lack of democracy, I'll give you credibility, when you make the same arguments about China, where personal freedoms are even worse, and governmental corruption is higher. So when will the eurolegacies start campaigning to limit Chinese carriers flying to Europe? Better yet, since Europeans are sooooo concerned about democracy, please limit all the billions in defence sales from Europe only to democratic regimes. Or are the double standards reserved just for airlines from the Middle East?
 
tommy1808
Posts: 14376
Joined: Thu Nov 21, 2013 3:24 pm

RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 4:56 pm

Quoting ytz (Reply 30):
(note that EK does not get special treatment on taxes in the UAE....it's not an exception),

Most companies have to be owned by a UAE citizen with at least 51%, that is an exception excluding about 7 Billion potential entrepreneurs.

Quoting ytz (Reply 30):
They could easily base some employees in the UAE.

For those few flights from/to DXB? Yeah, that is going to make a big big difference...

best regards
Thomas
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6
 
ytz
Posts: 3529
Joined: Thu Jun 25, 2009 12:31 am

RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 5:13 pm

Quoting tommy1808 (Reply 31):
Most companies have to be owned by a UAE citizen with at least 51%, that is an exception excluding about 7 Billion potential entrepreneurs.

Red herring argument. You started out by stating that the companies were subsidized. Then you moved to discussing taxes. Now you're discussing corporate ownership. Last I checked, as a Canadian citizen, I can't be majority shareholder in an American carrier either.

By the way, there are exemptions to these rules in the UAE, or a whole bunch of multi-nationals would have a difficult time setting up shop in the UAE.

Once again, none of this is illegal or discriminatory or even unethical. Every country is well within its rights to have whatever taxation regime it wants. And whatever restrictions they want on foreign ownership to protect their domestic interests.
 
dtw2hyd
Posts: 8841
Joined: Wed Jan 09, 2013 12:11 pm

RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 5:15 pm

Quoting ytz (Reply 30):
How is this any different than a government issuing legislation?

For starters, one family can decide faster than going thru federal + state legislature process. Take tax issue on aviation fuel in India. It is actually a state tax. 3 states impose 4% while rest of 26 states impose 28-35%. Very few states are willing to give up this income.

No single leader or family can fix it easily in a federal system.
All posts are just opinions.
 
PanHAM
Posts: 9719
Joined: Fri May 06, 2005 6:44 pm

RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 5:24 pm

Quoting ytz (Reply 30):
Where we are discussing taxes, particularly in the sense that these are tax rates applied to all coporations and employees (note that EK does not get special treatment on taxes in the UAE....it's not an exception), then this discussion is entirely relevant

yoiu don't get the message. I am not talking about corporate taxes but the cost per employee, which is far lower in the UAE as the companies there do not have to earn the personal taxes of employees when These are not taxed. understood?

Quoting ytz (Reply 30):

They could easily base some employees in the UAE. However, that has implications on staff morale and some sense of ethics and nationalism for the "flag carrier". I get that.

The Problem with that is that there is no local skilled Labor available. LH does Export Jobs since many years. some accounting is done in India, call Centers around the world, weight an Balance in Czechia. But the main cost base is Germany.


Quoting ytz (Reply 30):
companies being subsidized over there?

I am not talking about subsidies and have said that. But the total costs per employee includes the net pay, the taxes and social benefits, the Holidays etc. and that total amount has to be earned from the customers.

Quoting ytz (Reply 30):
And what is "ruler's decree

the oposite of a democraftic controlled process, to stay polite, an arbitrary act..

The ruler says "There will be an Airport" and it happens.

A democratic controlled government says we need an Airport and then the planning procedure starts, the legislative approval must be sought, People can object, the matter gies through the Courts up to the highest and it takes 10 to 20 years. .
Was Erlauben Erdogan!!!
 
ytz
Posts: 3529
Joined: Thu Jun 25, 2009 12:31 am

RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 5:26 pm

Quoting dtw2hyd (Reply 33):
For starters, one family can decide faster than going thru federal + state legislature process. Take tax issue on aviation fuel in India. It is actually a state tax. 3 states impose 4% while rest of 26 states impose 28-35%. Very few states are willing to give up this income.

No single leader or family can fix it easily in a federal system.

Again, individual governance issues within one country does not automatically mean the country with the more "efficient" system is somehow subsidizing their businesses.

Let's take the arguments in this thread to their logical conclusions. What you are arguing for is that countries which have more effiicient governance or lower tax rates should be forced to adopt the higher taxes and the poorer governance of states that have difficult competing. Does this make sense for any business?

Yes, the UAE has more a more efficient governance structure because it is more or less autocratic. No arguments there. But, anybody arguing that this is a subsidy would be laughed out of the WTO offices. You can't score an own goal and then blame your loss on the other team not playing as poorly as you.
 
ytz
Posts: 3529
Joined: Thu Jun 25, 2009 12:31 am

RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 5:33 pm

Quoting PanHAM (Reply 34):
yoiu don't get the message. I am not talking about corporate taxes but the cost per employee, which is far lower in the UAE as the companies there do not have to earn the personal taxes of employees when These are not taxed. understood?

I absolutely understood what you meant. But payroll taxes are simply part and parcel of a whole taxation regime. Nothing I have put down above changes. You cannot argue that lower payroll taxes are a subsidy when EK is paying the same payroll taxes (or rather the absence of them) as every other corporation in the UAE.

Quoting PanHAM (Reply 34):

the oposite of a democraftic controlled process, to stay polite, an arbitrary act..

The ruler says "There will be an Airport" and it happens.

A democratic controlled government says we need an Airport and then the planning procedure starts, the legislative approval must be sought, People can object, the matter gies through the Courts up to the highest and it takes 10 to 20 years. .

Read above. Arguing that your poor governance justifies trade action is not a logic that would survive long in any international sphere.

And in this particular case, it should be noted too that the Germany-UAE trade balance heavily (90% I believe) favours Germany. The UAE imports a ton from Germany. Any trade action would only result in pain for German corporations.
 
tommy1808
Posts: 14376
Joined: Thu Nov 21, 2013 3:24 pm

RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 5:44 pm

Quoting ytz (Reply 32):
You started out by stating that the companies were subsidized

Zero Tax is a subsidy.

Quoting ytz (Reply 32):
Then you moved to discussing taxes. Now you're discussing corporate ownership.

You said these subsidiaries are available for everyone, with zero discrimination, which is obviously not true. Its highly discriminatory and therefore a subsidiary.

Quoting ytz (Reply 32):
Last I checked, as a Canadian citizen, I can't be majority shareholder in an American carrier either.

Well, that is the USA, and probably something to look into, you can however buy 100% of a EU carrier. They won´t sell it to you, but there is no legal limit that is hindering you.

Quoting ytz (Reply 32):
By the way, there are exemptions to these rules in the UAE, or a whole bunch of multi-nationals would have a difficult time setting up shop in the UAE

And you somehow don´t notice that, if there are exceptions making it possible in some cases, it can´t, by definition, be non-discriminatory? Interesting...


Quoting ytz (Reply 32):
Every country is well within its rights to have whatever taxation regime it wants. And whatever restrictions they want


I totally agree to it and i am 100% pro limiting the total UAE international traffic rights to a reasonable amount, given the size of the country and its population, lets be generous, 30 Million/year... ah.. such a nice day, lets make it 50 million.

best regards
Thomas
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6
 
ytz
Posts: 3529
Joined: Thu Jun 25, 2009 12:31 am

RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 6:15 pm

Quoting flyenthu (Reply 28):
Anecdotally, I have heard from friends to the subcontinent, that they like Europe layover because the duration of flight from US is just right (about 8-10 hours) and then another 9 hours to India.

I have heard many say that too. Bu then they go ahead and book on the ME3 because:

Quoting flyenthu (Reply 28):
However, many state that they prefer the service and entertainment choices of the ME3 airlines.
Quoting flyenthu (Reply 28):
I think food, entertainment, small touches like mood lighting, starlit ceiling (hmmm!), cameras, galley snacks, hot towel service, charger stations, cumulatively adds up to the attractiveness. Not one thing, but an aggregated effect.

Another differentiator, IMHO, is the fact that the ME3 often have South Asian flight attendants on flights to South Asia. Having a native speaker of your language is a nice touch.

That helps in situations like these: My grandmother, traveling in a wheelchair, was abandoned at CDG while traveling on AF. She was taken off the flight from BOM. Left at the gate after the airbridge. Nobody to meet her there. She knew she had a short connection and managed to flag someone down after several airport and AF employees ignored her. At least she speaks English. The three other old ladies abandoned with her didn't even speak English. As a result of that experience, she now refuses to fly through Europe entirely. Anecdotal to be sure, but I cannot imagine her having that experience in DXB.

Finally, here in Toronto, I've had lots of family and friends rave about flying in the A380. I do believe that is proving to be a differentiator in our market. And this point will be hammered home, when AC goes high density on all their 777s.
 
ytz
Posts: 3529
Joined: Thu Jun 25, 2009 12:31 am

RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 6:26 pm

Quoting tommy1808 (Reply 37):
Zero Tax is a subsidy.

Not according to the WTO. Mine or your personal definition is really irrelevant as far as interational trade rules are concerned. A differential tax regime has never been considered a subsidy.

Exceptions include sector specific tax breaks (like those given to Boeing in Washington State).

Good luck to the EU trying to prove that simply have a low corporate or personal tax rate is a subsidy. They'd be laughed out like the year's best comedy special.

Quoting tommy1808 (Reply 37):
You said these subsidiaries are available for everyone, with zero discrimination, which is obviously not true. Its highly discriminatory and therefore a subsidiary.

Wrong. Anybody who sets up a business in the UAE pays no taxes. Where's the discrimination there? Just because there are business ownership laws does not automatically make the application of a tax regime discriminatory.

Again, your personal definitions are not what apply when trade negotiations happen. Indeed, given the fact that multi-nationals setup in the UAE, without local partners (that whole Emirati partner thing is really for private businesses), and pay no taxes, renders this argument moot. LH could move all its backoffices there, for example, and pay no corporate or payroll taxes if they wanted to.

Actually, this is even less of an issue than all those "special export zones" that othercountries create which provide tax break to exporters who set up in those zones. The UAE does not discriminate over what your business is, where it's located and where you're going to sell your wares. Everybody gets the same low tax rate.
 
ytz
Posts: 3529
Joined: Thu Jun 25, 2009 12:31 am

RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 6:39 pm

Quoting tommy1808 (Reply 37):
I totally agree to it and i am 100% pro limiting the total UAE international traffic rights to a reasonable amount, given the size of the country and its population, lets be generous, 30 Million/year... ah.. such a nice day, lets make it 50 million.

And nobody has argued that Germany is not within its rights to do so. EK can whine all they want about new rights to Germany. But it's up to Germans to determine whether the extra service is in their national interests or not.

What I take issue with, is the constant effort at lobbying outside Germany. For example, when all the European carriers lobbied the Canadian government to limit ME3 expansion in Canada. What gives them the right to limit my choice as a Canadian consumer?
 
ElPistolero
Posts: 2298
Joined: Thu Feb 23, 2012 12:44 am

RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 6:42 pm

Quoting PanHAM (Reply 12):

The Thesis that "legacies depend only on premium pax " is BS.

To which one might ask: when did LH finally introduce PTVs? And is it (longhaul) fleetwide? I've flown LH. I've flown the 744 rustbuckets with 31" legroom and 17"width.

Quoting PanHAM (Reply 12):
The legacies have advertise their Y producst as well as the J product.

Look at the ration of J:Y seats and compare it to other airlines. Advertising is nice. But if the seats aren't there....

Quoting tommy1808 (Reply 15):
Because the ME3 are heavily subsidized by there nation states.

Are the ME3 heavily subsidized by their nations states? Or are the passengers of the ME3 heavily subsidized by the ME states? Significant difference. Relevant given the relatively poor LH Y hard product offering (IFE, catering).

Quoting PanHAM (Reply 19):
I scratched AC off my carrier list a Long time ago. Last time I flew them was end ogf the 90s in J and was not too impressed. It was more or less the old F class I knew from the 70s

Pity LH didn't make the same decision.

Quoting tommy1808 (Reply 21):
no taxes are government subsidy since... ever? Well, pretty much...

No, its not. It never has been.

sub·si·dy noun ˈsəb-sə-dē, -zə-

: money that is paid usually by a government to keep the price of a product or service low or to help a business or organization to continue to function

There's a different between a government giving money to a business, and a government not charging taxes. There's no redistribution going on - they aren't charging someone and giving someone else the money. They just aren't taking money from anyone.

Quoting dtw2hyd (Reply 23):
Granted AC taking its Y bit too far on cozy side, but what options it has to compete with ME3. You have to appreciate AC for trying

Odd that you chose AC, given that it is the most heavily protected airline in the developed world. They're going to the cozy side without having to compete with the ME3. 9 weekly frequencies between the 3 of them. Nine. In a country of 35 million.

Quoting PanHAM (Reply 27):
LH's costs are somewhere at € 5000,00, which means for an employee making 2K net, LH Needs exactly €2K more turnover than EK.

While this is true, one could just as easily argue that someone flying from North America -> South Asia shouldn't be expected to worry about some German's income. That's why sixth freedom traffic is moving away from Europe.

Quoting flyenthu (Reply 28):
I think food, entertainment, small touches like mood lighting, starlit ceiling (hmmm!), cameras, galley snacks, hot towel service, charger stations, cumulatively adds up to the attractiveness. Not one thing, but an aggregated effect.

Very true. And a reality lost on most. When you're flying in Y, food and entertainment are key (all else - including price - being equal). Legacy carriers like LH are weak either in one or both of those categories. LH IFE Is nowhere near on par with North American IFE, let alone the ME3.

Quoting PanHAM (Reply 34):
A democratic controlled government says we need an Airport and then the planning procedure starts, the legislative approval must be sought, People can object, the matter gies through the Courts up to the highest and it takes 10 to 20 years. .

Democratic governments need to find a way of getting things that are ostensibily in their national interest, done in a timely manner.

Quoting tommy1808 (Reply 37):
Zero Tax is a subsidy.

Nope.

Quoting tommy1808 (Reply 37):
you can however buy 100% of a EU carrier

As a Canadian? Isnt this what the song and dance about EY and Euro carriers is all about?

Quoting tommy1808 (Reply 37):
I totally agree to it and i am 100% pro limiting the total UAE international traffic rights to a reasonable amount, given the size of the country and its population, lets be generous, 30 Million/year... ah.. such a nice day, lets make it 50 million.

Sure. But first, we must also ask LH to limit its sixth freedom traffic. Oh, there goes India.
 
tommy1808
Posts: 14376
Joined: Thu Nov 21, 2013 3:24 pm

RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 6:42 pm

Quoting ytz (Reply 39):
Wrong. Anybody who sets up a business in the UAE pays no taxes. Where's the discrimination there? Just because there are business ownership laws does not automatically make the application of a tax regime discriminatory.

If those laws exclude you from owning a business, hell yeah, that does make it discriminatory. Everyone can sit in front of the bus, that there are bus entry laws ("whites only") does not make it discriminatory....

best regards
Thomas

[Edited 2014-06-12 11:42:51]
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6
 
ytz
Posts: 3529
Joined: Thu Jun 25, 2009 12:31 am

RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 6:52 pm

Quoting tommy1808 (Reply 42):
If those laws exclude you from owning a business, hell yeah, that does make it discriminatory. Everyone can sit in front of the bus, that there are bus entry laws ("whites only") does not make it discriminatory....

Strawman. And irrelevant. Particularly with regards to multinationals like major airlines.
 
User avatar
lugie
Posts: 913
Joined: Mon Jun 03, 2013 4:11 pm

RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 7:10 pm

Quoting ytz (Reply 8):
I've seen so many family and friends be sincerely resentful about flying LH to India for their ratty old birds from FRA.

I'm quite sure LH fleet and service are far away from "ratty"

*Ironic exaggeration on*
But, hey, their average fleet age isn't at about 0.75 years like EK, EY or QR so that's a reason to bash them.
*Ironic exaggeration off*
Q400 E175 E190 CRJ7 CRJ9 CRJX MD88 A319 A320 A321 A332 A333 A359 B733 B73G B738 B739 B748 B764 B772 B77W B788 B789
FRA STR HAM TXL MUC ZRH ACE BRU BLL DUB MAN ARN MAD OPO LIS FNC AMS PHL RDU LGA CLT EWR ORD ATL SFO MDW IAD YYZ SJO PTY
 
PanHAM
Posts: 9719
Joined: Fri May 06, 2005 6:44 pm

RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 7:17 pm

Quoting ytz (Reply 43):

Strawman. And irrelevant. Particularly with regards to multinationals like major airlines.


International Airlines work under a completely different statute than "normal" companies. Their presence in overseas countries is sanctioned by the bilateral Agreements. they do not have to tax their passenger and freight receipts but can Transfer These unrestricted (OK, Venezuela) home. They can employ expat staff and local staff.

An Airline does not Need a Sponsor, most other companies do.
Was Erlauben Erdogan!!!
 
tommy1808
Posts: 14376
Joined: Thu Nov 21, 2013 3:24 pm

RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 7:24 pm

Quoting lugie (Reply 44):
I'm quite sure LH fleet and service are far away from "ratty"

that is also a cultural thing. KLM cabin crews are my favorite and, from when i was still flying LH, i always felt cared for very well and very friendy. Asien Airlines always did perfect service, perfect smile, perfect everything.... still, it felt fake. One exception: Uni Air, but that was probably because of zero English on their side (heck, not even the website has English) which took them out of their routine.
Other people find LH/KLM cabin crews cold and unfriendly and just plain love cabin crews of Asian airlines... *shrug*

best regards
Thomas
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6
 
ytz
Posts: 3529
Joined: Thu Jun 25, 2009 12:31 am

RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 8:04 pm

Quoting lugie (Reply 44):
I'm quite sure LH fleet and service are far away from "ratty"

*Ironic exaggeration on*
But, hey, their average fleet age isn't at about 0.75 years like EK, EY or QR so that's a reason to bash them.
*Ironic exaggeration off*

Until the deployment of the 747-8i, ratty would be appropriate. But more specifically on the complaints I heard, the biggest one was no personal IFE for the longest time.

Catering is still a big complaint.

Quoting tommy1808 (Reply 46):
still, it felt fake.

When Asians smile at you, it's fake. But when others have similar complaints they are to be ignored:

Quoting tommy1808 (Reply 46):
Other people find LH/KLM cabin crews cold and unfriendly and just plain love cabin crews of Asian airlines... *shrug*

Double standard much?

I wouldn't say people have issues with the FAs. That's rather low on the list for most Y pax. Bigger issues are the ones we keep discussing: seat comfort, legroom, catering, baggage allowance, price, etc.

Where FAs do come into play is the ability to speak native languages. This is particularly useful when serving South Asia.
 
tommy1808
Posts: 14376
Joined: Thu Nov 21, 2013 3:24 pm

RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 8:58 pm

Quoting ytz (Reply 47):
When Asians smile at you, it's fake. But when others have similar complaints they are to be ignored:

I specifically stated that it is a cultural thing, what seems nice & friendly to me in particular or to a German in general might seem unfriendly to others and the other way round.

Quoting ytz (Reply 47):
Double standard much?

So it is a double standard that i am perfectly aware of other people having a completely opposite perception than me?

Quoting ytz (Reply 47):
I wouldn't say people have issues with the FAs. That's rather low on the list for most Y pax. Bigger issues are the ones we keep discussing: seat comfort, legroom, catering, baggage allowance, price, etc.

Not for me. For me, unless the rest is unbearable, cabin crew is everything. Anything else i can buy, but i have to take the cabin crew that is on board. Don´t care for IFE either.

best regards
Thomas
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6
 
Planesmart
Posts: 2891
Joined: Sun Dec 05, 2004 3:18 am

RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 9:22 pm

Where the ME3 are concerned, you have to look at interest on loans, dividend, capital, and changes in those, as a barometer.

EK is a mature business, where the owners (country) have been extracting commercial returns, plus repayments for a decade. The other two are still work in progress.

EU thinks Chapter 11 provides US-based companies (not just airlines), with an unfair competitive advantage. Solution - EU countries should put up or shut up.

A new start in the USA and EU can accumulate tax losses (in fact they can at any time). In a zero tax environment, the benefits of tax losses are............

By country, look at each airlines published results, disclosed profit, and actual tax paid versus the country's corporate / company / biz tax rate. Isn't a playing field. Never was.

Even if we agreed to a global tax environment, there would still be winners and losers, influenced by exchange and interest rates, whether an airline was growing, declining or static, whether aircraft are purchased, leased, rented by the hour, current and projected credit ratings of the country and airline, etc

For 30 plus years, legacies and their Government friends made life very difficult for newcomers and third world airlines, with unfair purchase deals, mates rates interest, USD only funding (except in Europe), access to terminals / slots, etc.

When China and India get their airline act together, the legacies will really be unhappy. For now, enjoy the OK times. The good times have gone.
 
ytz
Posts: 3529
Joined: Thu Jun 25, 2009 12:31 am

RE: ME3 And Legacy Airlines

Thu Jun 12, 2014 9:38 pm

Quoting tommy1808 (Reply 48):
Not for me. For me, unless the rest is unbearable, cabin crew is everything. Anything else i can buy, but i have to take the cabin crew that is on board. Don´t care for IFE either.

That's a normal European perspective. But then you aren't traveling two 8hr legs in most cases. It's also why most north Americans who travel to Europe occassionally, don't have too many complaints either.

And that's exactly what allowed the TATL carriers to cut back and allowed the likes of the ME3 to get a foothold in these markets.

When you're travelling for 20-25 hrs, with 16-20 of that on the airplane, your perspective changes. Personally, I don't give a rat's behind about the FA's "service". Because really, what do they do in economy other than go around with the food cart and occassionally a water bottle. My concern is only that they are trained enough to handle evacuation in an emergency.

On the other hand, all those other aspects of service (catering, IFE, pax/toilet ratio), is determined by the carrier. And when I pay my fare, I want to fly a carrier that provides the most bang for my buck.

If it was all about price, LH would be wiping the floor with EK, since EK is legally barred from competing on price. Instead here they are blaming the drop in profits on the ME3. And it's not even about o/d passengers! They are complaining about losing sixth freedom traffic.

This makes your argument limiting EK in Germany more curious. LH doesn't really seem to care about O/D from Germany in so much as they care about losing all those pax transfering from AC and UA going onwards to (largely) South Asia, the Middle East and Southeast Asia. They can't do anything about that. And that's the problem for them. All they can do is limit pax in Germany. And hopefully (for them) by limiting the growth of the ME3 in Germany, they can increase yields (in normal speak that means make passengers pay more to keep LH alive at their expense).

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