Emirates Considers Oz Domestic Carrier

[Wirraway]

Repost from Airliners Net:
http://airliners.net/discussions/gen...d.main/789535/

(Sorry I don't have a eletronic copy)
The Bulletin - April 9 2002.

It basically says that Emirates are looking into this and that it has taken SQ & DJ by surprise and upset QF.

Sheikh Ahmed bin Saeed Al-Maktoum, chairman of EK has requested a meeting with PM John Howard about long term investment in Oz including the possibility of a domestic carrier.

Article by Tom Ballantyne

[SOPS]

Now, that could make things interesting

[rescue 1]

I seem to recall that EK were reportedly interested in the Ansett carcass last year.

The author suggested that EK is somewhat similar to SQ in that expansion can only be achieved outside its home country.

I assume now that DNATA can get the terminals and infrastructure at a much cheaper introductory price.

I don't think that we have seen the end of three airlines (or even 4??) just yet.

[NICEONE]

Who is DNATA?

[donpizmeov]

It did not get a mention in the Gulf News, so I guess its not going to happen.
Don

[Yankee 4]

DNATA is part of the emirates group, they handle baggage, ramp, cargo and tech services at DXB. They basically supply airservices to airlines in Dubia.

www.dnata.com

Whats wrong with market dominance of the domestic sectors by Qantas? Helps their expansion!!

[JetRacer]

Wirraway,

Are we able to get an electronic copy of the article?

Thanks in advance

JetRacer

[CI300]

There were quite a few large (full page / half page) adverts in the NZ papers for EK last month. I thought it was a bit strange at the time, but you never know.

[Wirraway]

Jetracer

No problem getting to the Bulletin site and finding the header,
problem is its subcribers only to get the story, my wife got me
a Bulletin yesterday, but its dated 16th April, these publishers
are running a week in front of themselves, as we want the one
dated 9th April. But the said article is definatly there.

Wirraway

[JetRacer]

Thanks Wirraway

Just have to wait for the paperback version to come out!!

Keep up the good work on the posts Wirraway!

JetRacer

[cardomumT]

A bit of journo assumption here I think, there are EK senior management heading to OZ this month but not in relation to any domestic activity. It's no secret EK have aspirations for the region that the Howard Government haven't met as yet hence the big guns from the company arriving. Nice idea the domestic but not factual I'm afraid.

The recent adverts for employment were in relation to the commencement of flights to PER which starts on 2 August for Airport, Sales and Cargo staff, nothing to do with domestic flights.

[Wirraway]

Just about got this problem article

Someone was good enough to fax this great article to
me last night, there is still no way I can get it from the
fax as I do not have a scanner, the only possibility was
to copy type the bloody thing, so being the mug that I
am, thats what I'm in the process of doing, after 3 hours
at it, should finish it in about an hour, will post it under
a new heading, its a great read, and feel it should get on
here somehow, it was either pay $130 for a subscription
for a year and copy-paste it or type it all out and save
my money, after this I will just pay the Subscription in
future.

Wirraway

[Wirraway]

"THE BULLETIN" 9/4/02 (Pg 46-47)
"High Stakes"

Note: I left 2 items out of this article to save some typing. 1) A bit about Emirates relationship with Air lanka and how
their planes were blown up by terrorists. 2) Emirates financial
report for last year. Otherwise the "Bulletin" article is complete, any spelling and format mistakes are Wirraways fault due to bad copy-typing, and NOT the author TOM BALLANTYNE.


High stakes
In the wake of Ansett, the emergence of a Middle Eastern airline on the Australian aviation scene has not only upset Qantas but also Singapore Airlines, which had plans for the regional market. Tom Ballantyne analyses the options

Still smarting from the disastrous investment in AirNZ and the Ansett debacle,Singapore Airlines may face a major obstacle to its hopes of regaining a solid toehold in Australia's domestic aviation market.

While SIA and its global Star Alliance partners ponder alternatives
to fill the gaping hole Ansett's demise has left in their world-wide
network, a rich and independent rival is moving quickly to sound out Australian prospects.

Airline sources in the Middle-East have confirmed that Sheik Ahmed bin Saeed Al-Maktoum, chairman of Emirates, the national flag of the United Arab Emirates has asked for a meeting this month with Prime Minister John Howard. On the agenda, long term investment in Australian Aviation.

Their talks could see an influential new player emerge to help shape the competitive nature of the local airline marketplace and underpin investment and growth.

While it is not known yet whether it's interest includes involvment
in domestic airline operations, it is common knowledge that Emirates is hell bent on huge expansion with an eye on securing a hefty chunk of Australasia-Europe air trade. The development will be monitored closely by Singapore because of the danger it represents to its regional strategic plans.

Privately, government aviation officials are buoyed by the prospect of Emirates interest because it underpins their contention that Australia's healthy economy, social stability and growth prospects make it one of the few places representing a haven for long-term sustainable aviation investments. In the words of one senior Govt aviation official; "If you want to make a 100-year investment in aviation then right now Australia is the place to do it...it has got to be an attractive proposition."

The excitement is understandable.

Emirates group doesn't only run an airline Subsidiary, Dnata is involved in airport services, cargo and ground handling. Another offshoot, information technology division Mercator, does business
on five continents, from this month Emirates will also begin using
Australia for its cadet pilot training which previously took place
in the United States. The move was made to relieve cadets of intense scutiny in the U.S. since Sept 11.


Ironically, the prospective combatant is a carrier shaped in SIA's
image. Cash rich and fast expanding, Emirates operates from Dubai which, like Singapore, lacks domestic growth potential. Using the highest service standards, it aims to become a "world" airline, leveraging off an emerging global marketplace, penetrating markets everwhere, with equity investment if necessary.


It has already upset Qantas with demands for almost limitless rights to fly to and from Australia. The Australian carrier's argument: Emirates isn't really interested in Australia-Middle East traffic but is poaching Kangaroo Route Pax heading for Europe. News that it is now stalking even deeper involvement in the Australian scene won't please management at Sydney airport.

With a fleet of about 40 jets flying to 57 cities in 39 countries,
Emirates last year placed the biggest order in history for new aircraft, a $28.8bn splurge on Airbus and Boeing to boost its fleet
to 100 by 2010, including an order for 22 Airbus A380, with options on another 10.

Emirates share of the Australian international market is modest but growing. It operates 49 monthly return flights from Dubai through Singapore to Sydney and Melbourne and will fly direct from Dubai to Perth in August. Like SIA, as it expands, it needs to cement domestic pax feed. Unlike SIA, it is not a member of any global alliance so can't look for help in that direction.

The arrival of Emirates money in Australia would be bad news for SIA, which hoped to let the dust settle on domestic aviation chaos before its next move. Now it has a dilemma. How long can it wait before opportunity passes by?


Analysts are unanimous that it must re-engage, not only for its
own sake but for the Star Alliance, which now has no Australian
domestic feed. SIA is the third-largest operator into Australia after Qantas and Air New Zealand, with 10.7% of the market, a single percentage point behind the Auckland flag. Five years ago, it had less than 7% and now operates into every mainland capital.


SIA will lift seats into Brisbane by 20% from June, with flights
rising by 71.5% in the past year. Yet if passengers want to fly on
domestically, SIA can suffer the indignity of passing them on to
Qantas, not only a fierce competitor but a member of of rival
alliance Oneworld. The dilemma for Singapore is that it appears
damned if it does and damned if it doesn't and the alternatives
are complex.

It can:

• Try to persuade Air NZ to fly domestically in Australia but that
  carrier has an image problem and no money.
  
• Jump the Star Alliance ship and, given expected changes to foreign ownership rules, perhaps even invest in Qantas and get into bed with Oneworld.
  
• Invest in Virgin Blue but in its present form- low-cost and no frills- Richard Branson's charge is unacceptable to Star or SIA
  because its service levels don't reach alliance standards.
  
• Launch a domestic group in Australia. Going it alone is a possibility because a precedent has been set by British owned
  Virgin Blue, SIA only has to show its entry is in Australia's
  interest - providing local jobs and local income - and a go-ahead
  would be assured.

Ian Thomas, of the Sydney-based Centre for Asia Pacific Aviation,
believes SIA will play some role in an emerging Virgin Blue operation.

He says government has to stop treating domestic and international aviation as different issues. "In reality, with Australia's liberal policy, domestic operations are no more than a continuum of the extreamely competitive international market ... Virgin Blue may struggle in the longer term without an international partner, which perhaps explains its interest in securing international rights previously held by Ansett. By obtaining these rights, the airline become a much more attractive proposition for a potential partner."


Other observers doubt a direct link between SIA and Virgin Blue.
Branson himself has dismissed speculation he will cash in his stake by selling out to SIA, saying he wants to retain an equal share with Patrick Corp.

However, if SIA decides to go it alone it will end up competing against Virgin Blue, an airline it has indirect interest in through its 49% stake in Blue's parent Virgin Atlantic. And if it waits to long to make a decision, someone else - such as Emirates - may move in.

And SIA will announce in May what will probably be its worst annual result for years. Contrary to some reports, it will not involve a loss. Insiders say it will be "several hundred million dollars to the good". But by SIA standards it will be well down. That, coupled with the losses it suffered in the NZ foray, will make it very wary.

The Middle-East operator has already outdone SIA in an area it has long claimed as its own - customer service. Emirates was voted world's best airline for the second year in a row by Skytrax
Research (UK) in a survey involving 4 million passengers from 84 nations.


END

HIGH STAKES (pg 46-47)
Copyright "The Bulletin" 9/4/02

[rescue 1]

Wirraway...you are a gentleman.

[cabin secure]

Thanks for painstakingly typing that article.
Obviously a 2 finger man! Not unlike myself. (except the man part).
Wish it had the remotest inkling of hope to it's fruition, however the last 6 months have taught me dreaming is for children.
Not old yet, but the cynicism is alive and duly rotting.

[cyclops camel]

This topic was brought up at a large pilot meeting, ie. birthday bash p*ss-up here two nights ago. The consensus seemed to be that future plans involved increasing Oz frequency and destinations, especially speeding up introduction of daily Sydney services. There is also a desire to utilise the aircraft as they sit idle between flights in Syd and Mel, perhaps with our own "domestic feeder" or possibly onward to NZ with 5th freedom. Emirates Holidays has also just begun selling NZ as a destination, perhaps as a prelude to us beginning ops there ourselves.

[apacau]

From an outsider's point of view, that's the way I see it too.

When daily services go into both SYD and MEL, each of the aircraft stationed there could swing onto domestic services. The MEL aircraft could fly 2 or 3 return MEL-SYD services and ditto for the SYD aircraft on SYD-BNE.

I'm not sure about how long the plane at PER will sit idle, but if it's like at SYD and MEL, there might be a PER-SYD-PER rotation in the offing.

Many people say that Australia can't handle 3 major domestic airlines. I'm not so sure, but what they certainly CAN handle is a 3rd airline on MEL-SYD-BNE.

Going into wishful thinking now, but what if they then picked up some CRJs or even larger aircraft to hook up SYD and MEL to CBR, ADL, HBA???

[Wonderworld]

Just why the hell should someone like EK be allowed to cherry pick the best routes like MEL SYD just because they might have an aircraft sitting on the ground. I'd like to see Qantas try and go set up flights around the UAE!

[cyclops camel]

Wonderworld,
Quite the contrary mate - the UAE has an open skies policy so QF could at any time begin services here to and from ANY destination, not just betwen here and Oz.
Emirates are literally not afraid of competition but prefer stimulating markets then offering a better product at a cheaper rate to the customer.
Shame we can't say the same for Qantas.

[MTOW]

Wonderworld,

I'd like to see Qantas try and go set up flights around the UAE!

I know that some might feel that it’s comparing apples with oranges, but the fact is, if QANTAS (or any other carrier) wished to do what you suggested, they could, with absolutely no restrictions – from the Dubai aviation or government authorities, at least – because the Dubai government operates Dubai airport as a true ‘open skies’ port. Unlike Australia’s so-called ‘open skies’ rules, which really translate into ‘what suits Skippy’. (A point worth noting though – many of the local Arabs consider the EK’s (two years in a row Airline of the Year) cabin service not up to standard, so I leave it up you to consider what they’d think of Skippy’s cabin ‘service’.)

Hard as it might be for someone who’s just lost his or her job, as so many from AN have done, any such operation started up by EK or anyone else, be it ‘cherry picking the best routes’ or not, would provide jobs for Australians IN Australia (and some outside) – jobs that don’t exist at the moment.

However, I have to agree with cyclops and others. Sheikh Ahmed is a camel trader par excellence, and what he’s doing here is classic horse (or camel) trading – negotiating with the babes in the wood in Canberra for what he really wants, and what Skippy, through their man in Canberra who poses as a government minister, has to date successfully prevented him from having – 5th freedom rights between NZ and Oz and between Australian ports. EK would love to be able to pick up pax from Perth and take them on to AKL, likewise, they would love to be able to pick up pax between Oz capitals. Everything else is pure horse trading, in my opinion at least

…unless Shk Ahmed would like a nice little Oz domestic operation to place his (Australian trained – ie, more jobs for Australians) cadets for a year or so to give them a bit of hands-on short haul experience before letting them lose on an A340 or a 777, as currently occurs. But if that’s the case, that would open a similar can of worms with people like ‘Wonderlworld’, because many of the jobs created wouldn’t be for the likes of him.

Unpalatable as it is for many, over the last twelve years - and particularly over the last six months - the goal posts in Oz Aviation have moved – as I’ve read elsewhere on this site – ‘on the back of a swiftly moving camel’, and it might be time for many in Australia to face that fact – or buy themselves a lawnmower and a ute.

If anyone wants an example of how completely out of touch with reality some in Australia are on the state of Aviation in this world, take a look at ‘Capt Zoolander’s’ post on the associated thread, ‘A320 Captains & First Officers’:

Does this mean Gulf Air are expecting to lose more Pilots to Virgin? It is hard to believe that any company in the Middle East is expanding with war on the doorstep. (my boldface)

Zoolander, EK is expanding by one new widebody per month for every month this year, and such is the travelling public’s fear of flying that the last few months have been the best for the company since its inception.