On 2 Jun, 15:36, Roland Perry <***@perry.co.uk> wrote:
> We'll see what happens to Emirates once the fuel prices start to hit (of
> course, they no doubt have their own cheap fuel, so are probably a poor
Less fuel than you might expect - Dubai is not a major oil producing
country and hasn't been for some time. Emirates will be fine: economic
gloom might slow expansion of its westbound flights (although business
links between Europe/US and Dubai are sure to keep increasing), but
growth in flights eastbound is going to continue at a rate of knots.
As far as fuel prices go, there's a small cost advantage to refuelling
in the mid-east compared with elsewhere generally - but the main point
is that Emirates isn't bound by a) US/Europe-style union deals b) US/
Europe-style debts or c) nearly-all-national-flag-carrier-style
incompetence and political meddling. This means it can make a profit
at far higher oil price levels than other carriers...
> American Airlines are cancelling their Stansted flights, and I expect to
> see more of that kind of thing. In the USA there is a bloodbath of
> cities losing direct flights (and in some cases all flights) as the
> airlines retract to their hubs.
But the expansion of European aviation over the last 10 years has
largely been on a point-to-point rather than a hub-and-spoke model,
which is completely not comparable with US trends [where AIUI
expansion has been based on serving an ever-increasing number of small
cities from major hubs, hence cutbacks involve reducing/axing flights
from O'Hare or Newark to Nowhere, Iowa].
I'm not sure Ryanair or Easyjet even has "hubs" in the traditional
sense - yes, they have a lot of flights out of Stansted and Hahn, or
Luton, Schiphol and Geneva, respectively - but only a vanishingly
small proportion of their traffic is made up of flights between those
"hub" destinations, and nobody in their right mind would change planes
there given the ticketing model.
Don't take this comment as bullish about the medium-term prospects for
the aviation industry - most European flag carriers and major US
airlines should all be bust already, and this will happen over the
next few years unless governments intervene on a 1970s scale.
But Easyjet, Ryanair and Emirates would be my tips for Airlines Most
Likely To Be In Business [*] In 10 Years Time, and "small-local-
airport to small-local-airport" for short-haul combined with "hub-and-
spoke, hub is somewhere outside the EU with low wages and cheap
kerosene" for long-haul would be my tips for most successful business
model. And high-speed rail will take a lot of the big-city-to-big-city
[*] Alitalia-style zombification does not count as "in business" in
[**] by 2012 I expect daily air seat capacity between London and AMS
to have fallen by 25%. Anyone want to take up a bet on this?
john at johnband dot org