Go Back  PPRuNe Forums > PPRuNe Worldwide > Middle East
Reload this Page >

Tough fight for EK in Canada

Wikiposts
Search
Middle East Many expats still flying in Knoteetingham. Regional issues can be discussed here.

Tough fight for EK in Canada

Thread Tools
 
Search this Thread
 
Old 10th Mar 2010, 17:38
  #1 (permalink)  
Thread Starter
 
Join Date: Nov 2003
Location: FL350
Posts: 15
Likes: 0
Received 0 Likes on 0 Posts
Tough fight for EK in Canada

Air Canada refutes Emirates Airlines' claim of benefits from more flights
Financial Post

The fight to limit Emirates Airline's access to the Canadian market escalated yesterday when Calin Rovinescu, Air Canada's chief executive, right, accused the UAE airline of telling "fairy tales" about the economic benefits greater access would create here. "Simply put, the market between Canada and the UAE has not developed to the point where more capacity is warranted. Period. Full stop," Mr. Rovinescu said in Vancouver. "There are already more airline seats being flown between Dubai and Canada than there are people to fill them," he said. But Emirates has been lobbying for greater access to the Canadian market in recent years. Under federal rules, it is limited to sharing six flights a week with Abu Dhabi carrier, Etihad Airways. Mr. Rovinescu said Emirates plans to fly passengers through its base in Dubai en route to destinations in Asia, the Middle East, and Africa.
Babybus Driver is offline  
Old 10th Mar 2010, 17:40
  #2 (permalink)  
Thread Starter
 
Join Date: Nov 2003
Location: FL350
Posts: 15
Likes: 0
Received 0 Likes on 0 Posts
From the Globe & Mail ....

Vancouver — Globe and Mail Update Published on Tuesday, Mar. 09, 2010 8:15PM EST Last updated on Wednesday, Mar. 10, 2010 8:41AM EST

After hearing about the United Arab Emirates' threat against a Canadian military base in the Persian Gulf, Calin Rovinescu decided he had finally had enough.

The chief executive officer of Air Canada unleashed a blistering verbal assault on Emirates Airline in Vancouver on Tuesday, lambasting his rival's recent assertion that more flights to Canada from Dubai will spark $480-million of annual economic activity and 2,800 new jobs. In a speech, he called the numbers “the stuff of fairy tales” and “subterfuge.”

Mr. Rovinescu said he was “troubled” that the UAE is trying to link more access for the Emirates Airline into Canadian airports to the extension of the lease on the Canadian military's Camp Mirage logistics base in the UAE. Established after 9/11, the base is a crucial staging area for the war in Afghanistan, but its lease expires this summer.

“That type of government intervention, I found unacceptable,” Mr. Rovinescu told reporters after his pointed speech to local business leaders in a luncheon speech at a downtown Vancouver hotel.

Emirates Airline is stated-owned by Dubai, one of the seven emirates that comprise the UAE. It is aggressively expanding internationally, trying to make Dubai a global airline hub, and wants to provide twice-daily service to Toronto, up from its current three flights a week, as well as service to Vancouver and Calgary from Dubai.

Mr. Rovinescu argued that while more competition looks good for customers, the long-term result would be “devastating” for the Canadian airline industry. He warned of fewer jobs, fewer cities served by direct connections to international destinations, and less economic activity.

“While its argument may be seductive, what Emirates' strategy will do is constrain the growth of Canadian airports by turning them from hubs into stubs at the end of a spoke that leads only to Emirates' hub in Dubai,” he said in his speech to the city's board of trade at a Vancouver hotel.

“Sure, you will be still be able to get to anywhere from Vancouver. But you will have to get there through Dubai,” Mr. Rovinescu said.

Two top Canadian politicians have given credibility to Emirates' efforts. The estimated economic gain, based on a report commissioned by the airline and prepared by consultancy InterVistas Consulting Inc., was publicly praised in the company's Feb. 23 news release by Alberta Premier Ed Stelmach, who said his province needs a direct connection to UAE “to stay competitive in the global economy.” B.C. Premier Gordon Campbell said “we need to capitalize on services like those offered by Emirates Airline to realize our full economic potential.”

Mr. Rovinescu, a corporate lawyer who became CEO of Air Canada 11 months ago, said his airline is expanding in Vancouver. Total capacity (known in the industry as “available seat miles”) is set to rise 3.3 per cent this July, bolstered by a 26 per cent increase to Pacific Rim countries. Daily service to Beijing and Shanghai begins in June, up from three weekly flights to Beijing and four to Shanghai.

Mr. Rovinescu said a Dubai-Vancouver Emirates flight could marginalize Vancouver as an international hub and threaten recently established international Air Canada routes like Calgary-Tokyo.

A spokeswoman for Mr. Campbell said on Tuesday that the B.C. premier's earlier comments stand.

An official response from Emirates Airline could not be obtained Tuesday because of time zone differences.

Vancouver – the closest North American city to China – wants to serve as a hub for Asia-United States air traffic and this summer the Vancouver Airport Authority starts a one-year trial in which Chinese travellers won't need a Canadian visa just to go through YVR en route to the U.S.

Larry Berg, CEO of Vancouver Airport Authority, was hesitant to endorse Mr. Rovinescu's entire view of Emirates Airline's potential impact, though he did say it is a “valid point” that Emirates wants to draw travellers to and through Dubai.

On potential “devastating” consequences for the Canadian airline industry, Mr. Berg said “Emirates would be just one more airline” and that there are “shorter ways to get to Asia” than through Dubai.

He said the most important thing for the Vancouver airport are border process issues with the U.S. and significant traffic growth is “within our grasp” if projects such as the China-U.S. traveller test are successful.

With files from reporter Brent Jang in Toronto
Babybus Driver is offline  
Old 10th Mar 2010, 20:16
  #3 (permalink)  
 
Join Date: Jan 2004
Location: Stratosphere
Posts: 226
Likes: 0
Received 0 Likes on 0 Posts
Simply put, the market between Canada and the UAE has not developed to the point where more capacity is warranted. Period. Full stop," Mr. Rovinescu said

Hmmm...that must be why you can never get a seat on the Toronto flights...
trimotor is offline  
Old 10th Mar 2010, 20:42
  #4 (permalink)  
 
Join Date: Aug 2007
Location: YYZ/BAH
Age: 41
Posts: 63
Likes: 0
Received 0 Likes on 0 Posts
See if Emirates and Etihad Airways get the right to fly double daily to Toronto + daily to Calgary + daily to Vancouver, the following repercussions will take place at these 3 Canadian airports which are as follows:

a) At Toronto, it will force many airlines such as KLM, British Airways to reduce capacity as well as force Air Canada to suspend one of their 4 daily TOR-LON flights. In addition, one can also bet on airlines such as PIA, Jet Airways, Austrian Airlines and Turkish Airlines to suspend their own respective flights to the city. Lastly, it will also prevent newer services being launched to the airport from interested carriers such as Egypt Air, Kingfisher Airlines, South African Airways in the long term.

b) At Calgary, it will guarantee both KLM and BA suspending their own flights. BA especially has not being doing too well out of YYC as is evident with them using a B 763ER on this route rather than a B 772ER.

c) At Vancouver, the biggest loser will be KLM however I dont see any airline suspending flights to YVR if EK enter that market segment!

d) Look at what Emirates has done to the German, Australian, London and South Africa market. They have literally raped it with excess capacity which has forced out many airlines out of those countries particularly in Australia. Compare British Airways in 1999 in the Aussie market versus now...BA at that time flew daily to PER/BNE/MEL/SYD (double daily) a total of 5 daily flights where as now they only fly to SYD!

e) In addition, it has played a key part in forcing many airlines to suspend flights in other key markets as well such as BA to CCU/DAC, LH to KHI/LHE, KLM/LX to KHI, KLM to HYD, AF to MAA, LH to MNL, BA to CMB, OS to Australia, AZ to HKG, PIA to IAH/NBO + reduce capacity to JFK, MAN!


f) Now some may argue that the same pillage has taken place at Karachi and Mumbai where EK is known as the un official national carrier of these 2 cities. The difference here is that these 2 cities desperately needed EK at a time when their own respective national carriers didnt know how to best handle the market demand situation hence EK came in and saved the day. Though if you ask me for KHI a max of triple daily and for BOM a max of 4 daily flights should have been allowed maximum.
behramjee is offline  
Old 10th Mar 2010, 22:53
  #5 (permalink)  
 
Join Date: Jan 2008
Location: Europe
Posts: 1,482
Likes: 0
Received 0 Likes on 0 Posts
EK have a better product than Air Canada. That's the real issue.
Iver is offline  
Old 10th Mar 2010, 23:31
  #6 (permalink)  
 
Join Date: Jan 2003
Location: traveling
Posts: 93
Likes: 0
Received 0 Likes on 0 Posts
I agree EK has a better product than AC. BUT, I do NOT think EK being granted a significant increase in landing rights into Canada is a good thing for Canadian jobs and Canadian aviation. Sure, a few Canadian pilots/cabin crew/ground staff will be recruited into EK for expansion. But the reduction in capacity at AC will cause greater total job losses than jobs created. EK offers a decent product because they do NOT play on an even/equal playing field. Just look at how they are threatening the Canadian government. Resorting to threats lacks serious class. If anyone actually believes that EK does not receive extra, significant, "unofficial" subsidies from the UAE government, they are not looking with truly open eyes. Not to mention the slave wages they pay to many of their "South East Asian decent" Dubai based staff. You cannot compare EK to AC. It is like comparing Apples to Oranges. The 2 airlines operate under completely different operating cost bases due to human/employee rights, and "unofficial" subsidies.
sony is offline  
Old 10th Mar 2010, 23:45
  #7 (permalink)  
 
Join Date: Jul 2005
Location: YYZ via the UK
Age: 49
Posts: 321
Likes: 0
Received 0 Likes on 0 Posts
This one really makes me laugh.

Air Canada are worried about Dubai as a hub airport stealing their passengers and traffic???
A Toronto-Dubai flight with Emirates is around 12-13 hours. Then add on whatever "connecting" flight that they are supposedly trying to pilfer you on and you are looking at a full day of flying.
Air Canada fly direct from Toronto to Hong Kong, Shanghai and Beijing. 13 hours....Why would you want to do two flights with Emirates the other way...for a long time period? Are Air Canada really that c***??
Same for their Israel flight. Would you go Toronto-Dubai-Tel Aviv or maybe just Toronto-Tel Aviv.

What other flights could they be worried about.

Vancouver-Sydney....direct perhaps. Or will people choose...Vancouver-Toronto-Dubai-Sydney....

a) At Toronto, it will force many airlines such as KLM, British Airways to reduce capacity as well as force Air Canada to suspend one of their 4 daily TOR-LON flights. In addition, one can also bet on airlines such as PIA, Jet Airways, Austrian Airlines and Turkish Airlines to suspend their own respective flights to the city. Lastly, it will also prevent newer services being launched to the airport from interested carriers such as Egypt Air, Kingfisher Airlines, South African Airways in the long term.
Why will KLM, BA and Air Canada have to reduce capacity when they can beat Emirates on any time factor with connections. Or is their product not up to scratch?
Why would Turkish have just started up to Toronto if they were worried about Emirates (when Emirates were here before Turkish)?

Why would Austrian suspend their service and leave no direct flight? People are going to fly Vienna via Dubai??

The only reason Air Canada would have to suspend one of the Heathrow flights is that you are competing against 3 BA flights in the summer, plus Transat to Gatwick and the regionals (and LL on the odd occasion)and Thomas Cook to all the regionals. In the summer there can be over 12 flights a day to the UK. What do Emirates have to do with that?

The only way PIA will suspend its service is if they lose certification on their aircraft again. Too large a pakistani population in the GTA for them to fail. Same goes for Jet Airways. There are plenty of passengers to serve both airlines.

Air Canada...concentrate on your own product...and stop being such a hypocrite!
Married a Canadian is offline  
Old 10th Mar 2010, 23:47
  #8 (permalink)  
 
Join Date: Jul 2005
Location: YYZ via the UK
Age: 49
Posts: 321
Likes: 0
Received 0 Likes on 0 Posts
EK offers a decent product because they do NOT play on an even/equal playing field
And there are only two major carriers in Canada because?????
Married a Canadian is offline  
Old 10th Mar 2010, 23:51
  #9 (permalink)  
 
Join Date: Jan 2003
Location: traveling
Posts: 93
Likes: 0
Received 0 Likes on 0 Posts
Why will KLM, BA and Air Canada have to reduce capacity when they can beat Emirates on any time factor with connections. Or is their product not up to scratch?

Because EK will charge $100 dollars (or some ridiculously low price) for a fare like YYZ-HKG-YYZ, while AC would never even be able to come close... due to completely different operating cost bases. People will fly an extra 10 hours if it will save them %50 on the ticket purchase price.

disclaimer: I do not work for AC, and I have no ties to AC. In fact I have more friends at EK than AC.
sony is offline  
Old 10th Mar 2010, 23:54
  #10 (permalink)  
 
Join Date: Jan 2003
Location: traveling
Posts: 93
Likes: 0
Received 0 Likes on 0 Posts
And there are only two major carriers in Canada because?????

You are married to a Canadian, you should know. Simple answer.... small population.
sony is offline  
Old 11th Mar 2010, 01:23
  #11 (permalink)  
 
Join Date: Sep 2005
Location: Post-Pit and Lovin' It.
Posts: 863
Likes: 0
Received 0 Likes on 0 Posts
Simply put, the market between Canada and the UAE has not developed to the point where more capacity is warranted. Period. Full stop," Mr. Rovinescu said

Hmmm...that must be why you can never get a seat on the Toronto flights...
That lack of seats is NOT due to Dubai-bound passengers, it's due to pax travelling beyond Dubai to Indian, Pakistan and the like. This is an important distinction! It explains why granting more access to Canada to EK would benefit EK far more than granting Air Canada more access to the UAE would benefit Air Canada. The market for Dubai-bound pax with Dubai as a final destination is miniscule.

Basically EK would like to siphon off as many pax as they can to feed the DXB hub and their growth. Naturally! But they can't complain about unfair practices while they're benefitting from their own cozy arrangement with their government (which apparently includes getting it to blackmail foreign governments), and while they're exploiting the crap out of their own workforce.

No love lost for Rovinescu or AC, but this time...good on him for fighting back.
nolimitholdem is offline  
Old 11th Mar 2010, 01:32
  #12 (permalink)  
 
Join Date: Jun 2000
Location: Canada
Posts: 819
Likes: 0
Received 0 Likes on 0 Posts
I don't know, but personally, and I understand this is simply a personal opinion, I don't think Emirates has added up (financially) since the day it started. As for competition with Air Canada or Air Anyone, over the long run, I doubt it.

For years their passenger traffic and RPKs were never mentioned in data sources like Air Transport World (because EKs kept the stats secret) and like any "new" airline on the Canadian scene, while they caused a certain degree of disruption when they cannonballed into our market, the waters will calm, inshallah.

With what you read, hear and see on a daily basis about Dubai and its financial troubles, one can only suspect the 'house of cards' is about to fall and with it, the crown jewel. So, it could all be a moot discussion down the road. Passenger loads mean SFA when it comes to profit and loss. Why? Because it depends on what was charged for an airfare.

I have to ask what the real market must be like when you switch an A380 from a market like New York to a market like Toronto? Leaving a market of over 8.3 million versus 2.5 million people? OK. How does that work?

It also makes me wonder how an airline that pays for its employees' accomodation, telephone, utilities, school fees, health care, etc., etc., on and on, balance their books and find profit year after year? Puts interest free money up for car loans, etc., can charge low airfares and make sufficient 'profit' year after year to cover all these expenses related to running this airline and still claim they're profitable. Sorry, in my simple mind where I ignore many of the trailing zeros, they just don't add up. If the financial stream isn't from fare paying passengers, then where would it be from? wink, wink

When you look at specific economic realities for Air Canada versus Emirates, I'm sure you know as well as I, which one plays the real game in real competition with real airlines.

Unfortunately, from what we read, it sounds like they're now having trouble recruiting pilots to man their fleets and judging by the posts we read elsewhere, it makes you wonder. That's a sure sign of trouble coupled with their 'difficult to imagine' financial state. I expect managers will be sacked then replaced as the blame for certain short comings wreaks havoc within this airline. Pilot managers will be blamed for not crewing aeroplanes at an acceptable pace. Line pilots will bail out or pull a runner or be fired for calling in sick and causing the company to park aeroplanes, but in the end, I suspect it could lead to delivery cancellations.

58 A380s for delivery and if sufficient number are cancelled, there will be financial penalties not to mention the peril is could place Airbus in. Political will in Europe, not withstanding.

Not sure if I'd agree that Emirates is that serious a threat? At least not for the long term. They're more likely just interested in having destinations for their wicked large fleet.

I guess time will tell.

Willie
Willie Everlearn is offline  
Old 11th Mar 2010, 02:42
  #13 (permalink)  
 
Join Date: Apr 2006
Location: the twilight zone
Posts: 406
Likes: 0
Received 0 Likes on 0 Posts
Married a canadian: EK flies to Tel Aviv? Use your f**kin head buddy
sec 3 is offline  
Old 11th Mar 2010, 02:51
  #14 (permalink)  
 
Join Date: Mar 2007
Location: RWY03
Posts: 68
Likes: 0
Received 0 Likes on 0 Posts
Emirates has a better product? Not from my recent trip! Couldnt be bothered to get off their lazy asses to serve water!

But the ticket was dirt cheap!
Oz_TB10 is offline  
Old 11th Mar 2010, 02:55
  #15 (permalink)  
 
Join Date: Jan 2007
Location: Earth
Posts: 22
Likes: 0
Received 0 Likes on 0 Posts
Grrr

The point we are making is not about the 'product' it's about the viability!
sandbunny is offline  
Old 11th Mar 2010, 03:07
  #16 (permalink)  
 
Join Date: Mar 2000
Location: Canada
Posts: 123
Likes: 0
Received 0 Likes on 0 Posts
"Hmmm...that must be why you can never get a seat on the Toronto flights..."

Two days ago, a 380 went "mechanical" in YYZ (big-time fuel leak). EK ferried in a 777 to rescue the pax. It was not full when it left.
wrenchbender is offline  
Old 11th Mar 2010, 03:53
  #17 (permalink)  
 
Join Date: Feb 2002
Location: UAE
Posts: 165
Likes: 0
Received 0 Likes on 0 Posts
Sec 3 you beat me to it!!!!!
Togalk is offline  
Old 11th Mar 2010, 04:05
  #18 (permalink)  
 
Join Date: Jan 2003
Location: Eternal Beach
Posts: 1,086
Received 0 Likes on 0 Posts
behamjee

Your argument is persuasive, however a little disingenuous as well.
You have left out one important ingredient as to why many of those airlines you mention have downsized their operations into certain markets: Airline Alliances and code shares.

I don't have to tell you that alliances feed on themselves and become restrictive for their own members to cut duplication.

BA to Oz is a classic example.

It's not just AC pitching in this game, it's also the Star Alliance and over their shoulder all the other alliances, as EK is an outsider (in more ways than one).

Don't know much about the UAE government threat, but if it's true then it just goes to show how they treat everyone as has been brought to light in the not too distant past.

halas
halas is offline  
Old 11th Mar 2010, 09:58
  #19 (permalink)  
 
Join Date: Dec 2008
Location: in a hotspot on that planet
Posts: 314
Likes: 0
Received 0 Likes on 0 Posts
2wrenchbender..

B777 wasn't full because a lot of people where already rebooked....

Last edited by flaphandlemover; 11th Mar 2010 at 11:12.
flaphandlemover is offline  
Old 11th Mar 2010, 10:26
  #20 (permalink)  
 
Join Date: Mar 2003
Location: uae
Posts: 2,777
Likes: 0
Received 0 Likes on 0 Posts
A quiuk look on trips and you can see how the 380 most days is over booked.
fatbus is offline  


Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service

Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.