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EMIRATES came under a sustained attack from airline chief executives attending an airline conference yesterday during a heated debate on government ownership and allegations of "outrageous" capacity dumping in Australia
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I'm glad, EK have already robbed Pakistan of a number of airlines mainly at Karachi.
In 1997 KHI-DXB was served by the following;
Singapore Airlines 743
Royal Jordanian L1011
Kenya Airways A310
KLM 747
Lufthansa A300
Swiss Air A310
Today ist just PIA, Emirates, Malaysia Airlines and the two Pakistani privates Shaheen and Aero Asia, its rumored Air Blue will also fly the route from mid June, while Royal Jordanian will drop Pakistan from the 1st of June.
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This is not the last time that Emirates is being attacked by Australian carrier's bosses. I think, last time, Air New Zealand also attack Emirates because they believe that EK has caused Air New Zealand's profit to stall. The reason is the same, capacity dumping.
Emirates has dumped the capacity of their service to Australia and New Zealand. As you all know they are using their B773 and their newly launched A345, and probably with their "going to get" A380 as well.
In one way they can attack Emirates, they have the right for it. But, one thing they forget is to remember that Dubai is an amazing new playground for air traveller. When nobody wants to stopover in Midle East, Australian and New Zealand's carriers are still happy with their hub in Singapore or Bangkok. The situation of Dubai has changed, everyone is interested to see what Middle East is, more or less, and especially the great airport itself with a good duty free shops.
It's time for Australian and New Zealand's carriers to push Singapore and Bangkok or Kuala Lumpur to be more attempting for air traveller. The last thing is probably to approach the local authority to limit Emirates' landing rights.Comment
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Not a scoop, it's all versus Emirates the way it has already been for
- Singapore Airlines until the mid eighties
- Southwest Airlines from day one
- Laker mk1
list goes on
AlainComment
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It is outrageous how the airlines blame Emirates for their own problems.
Try tell that to Alitalia!Qantas chief executive Geoff Dixon also took a swipe at Emirates, claiming that it enjoyed the luxury of being owned by a Government that also owned the airport and set aviation policy.
"Any airline CEO that can control the airport and the Government would be making a lot more money," he said
As long as the airline operates like a market entity without any government protection and subsidies, why can't they be owned by government? Government would be just like a "strategic investor" in this case. Singapore Airlines and Thai are both owned by government (not wholly owned but majority owned). If the government act to build and expand airports, it's for the good of the country itself, not just for the airline. No one denies others from flying to DXB. And it's the British government who should think why it takes so long to expand LHR, instead of having the Dubai government to work like London's.The debate lasted more than an hour after British Airways chief executive Rod Eddington queried whether airlines should be government-owned or protected.
This comment is plainly funny. If I were Emirates' president, I would say "This is none of your business". Why does EK have to report to other airlines' (or any non share holding entities) questions about how they finance their procurements? If Citibank is to buy a massive lot of land in Manhatten, does Bank of America's CEO come up and question how Citibank is going to finance that land purchase? If there are banks willing to lend money to EK to buy planes, that's the banks willing to accept the risk of doing so and no one (except for the shareholders of the banks) can question that.KLM president Leo van Mijk bluntly asked Mr Clark to explain how Emirates was going to pay for all the aircraft.
"We have doubts on how Emirates can finance its A380s. Where are you going to get the money?" he asked.
And I strongly suspect that Airbus is bankrolling EK to make such a big order. So may be KLM's president should ask his master, or should I say the French, why they are financing EK?
Well said! The presidents of the European airlines should go to Brussels and ask why the economy has stagnated for the last few years with sub-zero growth and 10%+ unemployment.Mr Clark reminded delegates that Emirates was responding to an extraordinary annual GDP growth of 16 per cent a year in Dubai.
"We get no government guarantees and our unit costs are much lower because we work hard and smart," he said.
And they should ask why their costs are so high. They simply can't effectively compete with anyone who can offer a lower fare. Cathay Pacific and Singapore Airlines are consistently matching (or undercuting) the fare of the LCCs flying between HKG and SIN. It's obvious that the two "legacy" carriers are still making money with that kind of fare. Can BA or KLM say the same? CAN THEY MATCH Ryanair's fare!!?
From how I see it, EK succeeds because it is the first airline to discover that the Gulf region is a strategic location between Europe, Asia and Africa. It is an ideal location for connection between these three regions. And it takes full advantage of that. The miserable state of Pakistani, Indian and African carriers act as a catalyst to EK's success, since they cannot wage any meaningful defense against EK's strategy of taking their European traffic. Built on that, EK can expand further and take on airlines that are in better shape. It's as simple as that. If Gulf Air recognizes the potential of its geographic location, it would have succeeded before EK was even born. But it didn't, so the chance was passed, until someone picked it up.Next:
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Its the foreign carriers who were plying KHI-DXB that are missed, not Pakistani ones that were never competition for the likes of most carriers listed above.
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Shortly, those CEOs are worry with Emirates' order, their huge order. Those European carrier CEOs are worry if in a few years to come Emirates will penetrate their market or home base by dumping capacity to their region.
We know what will happen if capacity dumping happen, lower ticket price, lower profit, worst thing can happen is making lost because of uncovered high operational costs.Comment
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Whatever is necessary, is never unwise.Comment
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EK if you really think about it, isn't really 'capacity dumping' across the tasman per se. It is simply easier and more cost effective for them to carry cargo and a few passengers across to NZ and back than to park their aircraft on the ground all day which is not cheap and doesn't do wonders for utilisation. Currently the trans-tasman market is saturated to say the least. The chiefs of NZ and QF should really stop whinging about EK. If NZ could transform its entire domestic operation to a no-frills service and effectively maintaining control over the domestic market, then there's no reason why they can't beat the likes of EK across the Tasman too.
One really cannot use the excuse that EK is where they are only thanks to help from the government. Let's look at NZ (who were bailed out by the kiwi taxpayer for their own blunders), SQ (favourable depreciation regulations), MH (state-owned), TG (state-owned) among others. It's really how they use their resources that matters.
There's a big difference here and you know it. It's like Apples to Oranges. Asia is still very service-oriented and many still prefer the superior service offered by the full-service carriers. Secondly, Labour laws in Asia are more relaxed than the likes of Europe and the States, enough said. And thirdly, Asian carriers can rely on cargo revenue to cover weak pax. revenues say if the loads in the cabin are light or the yields are low (due to fare cuts). European/American carriers operate in a different environment and with different equipment to Asian carriers so you really cannot say 'if the Asian carriers can do it, so can they'.Originally posted by CathayPacificComment
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