PPRuNe Forums - View Single Post - What is going on at EK
View Single Post
Old 25th Oct 2014, 09:45
  #3 (permalink)  
SMT Member
 
Join Date: May 2008
Location: Europe
Age: 45
Posts: 625
Received 0 Likes on 0 Posts
1: It would be nice if you would provide some substance to back those numbers. It is certainly within the realms of possibility that BA, LH, EY and QR will order more, and once Air China finds they can no longer buy 747s, they might spring for a few as well. Even more so when Airbus fits the kite with a new team of donks, bringing the much-wanted CASM figure below that of the new 777.

2: US airlines derive a sizable portion of their revenue from ancillary sales, e.g. checked baggage, food, drink etc. All this is still included in the ticket price of EK, which is something most long-haul travelers appreciate. Secondly, EK is a long-haul airline; US airlines are predominantly domestic, one in particular exclusively so, with an international presence. Operating long-haul internationally is rather more expensive than domestic, with max. sector lengths of around 6 hours, particularly when compared to the US. Further, EK's traditional market is hauling people on and off the sub-continent, a large portion of which does not command the disposal income of your average US citizen. This in turn drives yields down, meaning you'll earn less for every passenger carried. Do note, this has nothing to do with the price of a ticket, but everything to do with the cost of producing that seat. In other words, it's about whether you earn 100 bucks on a 500 bucks ticket, or 95 bucks on a 1000 bucks ticket. Furthermore, being a domestic airline the US big-4 are deriving the vast majority off their narrow-body fleet, pottering about on 2 hour sectors. This enables an aircraft to make around 3 round trips per day, carrying a total of around 800 passengers (6 x 150). Compare that to flying a big jet with 400 seats for 10 hours, carrying the same 800 pax a day but at higher cost. And last, but certainly not least, through a series of Chapter 11 re-organisations, most US airlines (with just one exception among the majors) have financially raped their creditors, employees and retirees over and over and over again. To my knowledge, EK has continuously delivered a positive return on investment to it's owners, and have never been even close to filing for bankruptcy.
SMT Member is offline