Delta mounts legal challenge to Emirates

[fareview]

http://centreforaviation.com/analys...ce-as-its-protectionist-stance-deepens-146518

Interesting stuff...despite Etihad bailing out Alitalia.

I agree with the authors summary at end of article.

fv

 

[CFIT]

Easy guys, this seems to be a pretty big deal.

As soon as the General pulls his finger out of his butt, he can let us all know exactly how this will play out.

 

[8sugarsugar]

and further news, Delta has hired General Lee as their lawyer. A copy of his opening argument is below.

"Riiiiiight, Emirates wants to fly more 5th freedom, will never ever happen. Enjoy that! Have fun in Dakar! riiiiight. Enjoy that profit share! You will be raped in Dubai! I make more money you! Birmingham to Kansas City, riiiight! Enjoy that!"

The judge was throughly confused on what point General Lee was trying to make.

 

[Noserider76]

Pretty biased article. Many issues involved and worthy of a fight for DL and all Western carriers in my opinion. Is it right for a company to be "competitive" using ultra low wage third country nationals? Another state sponsoring the hoped for demise of local carriers? The end result would be to destroy the standard of living of the home country employees as their airlines try to compete with a state sponsored entity that uses low priced employees for various areas of the world.

Luckily the US carriers are profitable, the US is getting ready to turn off the Mideast oil spigot, and US carriers should soak up many of the world's available qualified pilots. A couple years ago this may have turned out differently when the US carriers were on their backs.

 

[Dan Roman]

qualified pilots vs new aircraft orders

Could this be a hint of what the future holds?

http://indiatoday.intoday.in/story/...pilots-boeing-777-higher-salary/1/333934.html

 

[General Lee]

I think these snippets in an article by Adam Weinberg of M?tley Fool better describes the actual situation:



"A geographical problem

Emirates, Qatar Airways, and Etihad Airways have exploited favorable geography to drive lots of connecting traffic through their hubs. For travelers heading between Europe (or even South America) and Asia or Australia, the Persian Gulf region is a reasonably convenient connection point.

Emirates has taken this strategy to its logical extreme: It operates only wide-body aircraft, and its fleet skews toward the very largest wide bodies on the market. These big planes are typically the cheapest to operate on a per-seat basis, which allows Emirates to offer lower prices to attract more customers. Since Emirates has a single mega-hub in Dubai, it can fill these seats with passengers traveling on to many different final destinations.

By contrast, for travelers going from the U.S. to Europe, East Asia, or Latin America (i.e., all of the top international destinations), the Persian Gulf is thousands of miles out of the way. India and the Middle East are two of the few destinations for which Dubai, Doha, and Abu Dhabi are sensible connection points.

As a result, the Gulf carriers' business models don't work well in the United States. Few travelers heading from New York to Shanghai will be interested in going 3,500 miles out of the way to Dubai. Moreover, the additional flying distance would increase costs. The Gulf carriers can still fly to a handful of the top U.S. metro areas, but they need to manage supply based on the comparatively limited demand for travel between the U.S. and the Middle East/South Asia."



However, Emirates has characterized the New York-Milan route as a "one-off" thing. Indeed, that route is somewhat unusual, because while Milan is a large business market, it is underserved because of Alitalia's decision to locate its main hub in Rome instead. This created an opening for Emirates to fill a very large plane (a Boeing 777-300ER) without relying on the connecting volume of its Dubai hub.

By contrast, for high-volume routes such as New York-London, New York-Paris, Chicago-London, or Los Angeles-Tokyo, the U.S. carriers and their international partners will be much harder to unseat.

AMR has joint ventures with British Airways and Japan Airlines; Delta Air Lines has joint ventures with Air France and Virgin Atlantic; United Continental has joint ventures with Lufthansa and ANA. For most major routes, at least one of these joint ventures benefits from hubs on either end, allowing frequent service. Emirates would have more trouble breaking into these well-supplied markets.


On the other hand, for lower-volume routes (especially to Europe), U.S. carriers use smaller aircraft such as the Boeing 757 or 767. The 757 typically seats fewer than 200 passengers in an international configuration, whereas most of Emirates' planes have 300 to 500 seats. If a carrier like United can only fill a 757 for an international flight, despite having a large hub at Newark Airport to generate passenger "feed," Emirates doesn't have a prayer of filling a much larger 777.

Foolish bottom line

Emirates -- and its regional rivals Qatar Airways and Etihad Airways -- is clearly looking to expand. After two huge orders last week, Emirates has 385 widebody planes on order, worth as much as $166 billion at list prices. Emirates is already the largest airline in the world by international traffic, and it is clearly on pace to become the largest by overall traffic within the next decade.

Fortunately, the U.S. carriers can hide behind favorable geography and strong U.S. hubs. While Emirates and the other Gulf carriers are well positioned to steal traffic from European and Asian competitors, their hubs cannot offer reasonable connections for most international routes to and from the United States. There are also very few routes like New York-Milan, where Gulf carriers could feasibly compete "away from home."

The top European and Asian airlines need to gear up for a costly battle with Emirates, Qatar Airways, and Etihad Airways. Otherwise, they could lose a large part of their high-value international business traffic. However, for the U.S. legacy carriers -- Delta, United, and American -- this threat is overblown."




There is no doubt we have to watch the big three, and protect flying rights. Canada and several European nations limit the Gulf carriers, because nothing they offer can possibly help the other countries. The Gulf Carriers want opens skies for a connection hub, primarily because not enough people want to actually travel to those hot, sweltering wastelands. Sure, DXB is pretty modern, but most of the O&D passengers who want to stay there are laborers from India and Asia to build growing infrastructure to try to make that hotbed feel inhabitable. The Gulf carriers use someone's bank credit (can't order $50 billion in planes without a co-signer) to try to get access to airports, and threaten to take orders away if nothing is granted. Well, go buy Anantovs! Good luck with that!


Bye Bye---General Lee

 

[jonjuan]

That's not debating, el private lee. That's copying and pasting, something which you seem to be good at doing. 25,000 posts by the end of '14? Methinks so.

 

[General Lee]

Pretty biased article. Many issues involved and worthy of a fight for DL and all Western carriers in my opinion. Is it right for a company to be "competitive" using ultra low wage third country nationals? Another state sponsoring the hoped for demise of local carriers? The end result would be to destroy the standard of living of the home country employees as their airlines try to compete with a state sponsored entity that uses low priced employees for various areas of the world.

Luckily the US carriers are profitable, the US is getting ready to turn off the Mideast oil spigot, and US carriers should soak up many of the world's available qualified pilots. A couple years ago this may have turned out differently when the US carriers were on their backs.

Well said. OPEC is not as powerful as they used to be, and their fear of losing influence is showing. Australia just hit a huge oil find too, larger than the amount of oil in Saudi. Oil dependence on the ME is waning.


Bye Bye---General Lee

 

[General Lee]

That's not debating, el private lee. That's copying and pasting, something which you seem to be good at doing. 25,000 posts by the end of '14? Methinks so.

I guess you didn't read my last paragraph. Oh wait, you can't read anyway. Absolutely zero of your posts have contributed anything to this board. Not surprised....


Bye Bye---General Lee

 

[fareview]

All interesting points.

Dubai has no oil.

One of the issue for countries that have open skies with EK - is that with the large countries that don't (Canada, Germany & India) - it induces EK to put their rapidly expanding fleet into existing markets. Whereas YVR, YYZ, YYC & YUL would be more attractive to Emirates in the near term than ORD, MIA & ATL by closing out the UAE it actually results in massive expansion in the US, UK & Oz markets.

ie The US majors are funding Air Canada's protectionism....and Open Skies with the US is here to stay because of massive Boeing orders.

If the US wants a level playing field they need to chat to their Northern neighbors.

fv