European airlines determining how to counter growing Emirates

No unioin....No rights....is WTO listening?????

There is no personal income tax in the UAE. This allows EK to pay its employees at basically half rate. This is a distinct competitive advantage.

How can someone doubt about the fact that EK will receive all the slots it needs ? A $11bn order, government will allow Middle east carriers to take off and land from Europe for this kind of amount.
The question is: are the european carriers able to adapt their offer? The cost competitive advantage for EK is gonna kill them

The below average wages as mentioned by Tom is interesting but it all depends on the person's perspective. There are still many takers out there and I travel sometimes on Emirates and it seems that this airline does not have problems recruting people from all over the USA, Europe, Africa, Asia, you name it. I have nothing against unions but these days both Aviation Executives and Unions need to wake up to reality. The reality is that Executives cannot maintain hefty salaries in the current world economy and Unions cannot make unreasoble requests without taking into account the new variables in aviation. While, Unions and Execs are having tug of wars in the western world, the middle-east carriers are busy planning to take over the world.

It’s the service level my friend and of course the fare levels.

Now don’t you think that’s a dirty way to pull your competitor down and if I say that’s all the Europeans are capable off, what would be your stand?
Do they have the guts to compare their level of service to EK QR or any Asian carriers...May be, they can compare theirs with our no frill carriers service.
No Union , No rights - still see the number of Europeans and other nationals from countries with unions and strong human rights rules working for middle east carriers.

The geographical location of EK's hub I think plays a huge part. Of course, product quality, lower costs and less regulation are key ingredients of their success. But with Dubai pretty much at the centre of the world's busiest transfer routes and a mere 5-6 hours from large population centres like Europe, South Asia, parts of SE Asia and Africa, EK can more profitably operate a number of routes that European and Asian carriers cannot.

What I believe can tip the balance moving forward, is perhaps overly intense competition among the ME carriers and closer co-operation among European carriers through their alliances.

At EK, while the "cash" may not rival what US and European operators pay, they get some perks that all the others don't. Namely, free accommodation, free utilities (up to a max that I heard only 11% exceeded) and transport by the company limo's to and from all flights and training.

To compare apples to apples, you'd have to add essentially a complete mortgage, a car payment (to include gas/mx/insurance), medical premiums and your monthly utilities bill to come up with a close approximation of equivalent pay. While I've heard those guys fly something like 92 hours a month (according to my best buddy over there) the perks and flying seem to make it doable for him

EK has a better outlook than all other European and US airlines: being an airline owned by a big consortium (which is nearly bankrupt), but getting money from its next to door brother, is very easy for EK to grow.
Neither European nor the US airlines, will be allowed having cash from another country, just to stay "alive"!
Well, at this point, there is a big difference between the Gulf region and the West countries!
Moreover, subsideries from the oil industry is keeping up EK to a high level, as well taxes, which are not applicable in the Gulf region. How else can one buisiness ticket be nearly twice cheaper at EK than it is for example at LH?
EK has a nice brand new fleet with a cabin interior which is very nice and confortable for ones eyes, but service on board is very far away (I mean cabin staff) from many European carriers!

Competitive advantages.
Emirates has it's hub at a wonderfully sweet spot in the world. Most of its customers actually come from fast growing "new" economies. Given the amount of people in India, Pakistan and China that are reaching middle class status, there is still enormous growth potential left, also for new A380's. Next to this growing customer group Emirates employs smart modern management practices to utilize their cheap labour from India and the Philippines. If you look around at the Dubai hub, there are no idle people standing around. Everyone has to work hard. Add to this the lack of taxes and a 6-day working week, you have high productivity at very low cost. The government of Dubai recognizes Emirates and the Dubai hub as one of its economic focal points. The state is very supportive of Aviation in general. However it use policy, not money to promote the airline and the hub. There are no hidden subsidies. The last competitive advantage comes from Emirates' sheer size and financing power. It employs some of the worlds most innovative finance specialists who regularly win prizes with new finance constructions. Add to this a magnificent utilization of these expensive assets and the picture becomes clear. Legacy European carriers don't stand a chance. The only brake applied is old fashioned protectionism.

The solution to the EU carriers´problems is hidden in the indian market

It would be interesting to see to what level EK gets subsidized by the government of Dubai. No Annual Report exists and with Qatar and Emirates following the same model of having a wealthy 'sugar daddy' it will be hard to comepete with them until the money runs out.
Its time to open the books on all carriers, NO subsidies, distorts competition, there is no way a small country like Qatar should have a world class airline, but they have money, but they don't make money.
Can't allow western airlines to compete with heavily subsideized airlines it will ruin the industry.

Lack of an independent [and customer/safety-focused] government oversight agency is worrying. As a previous post observed "Whatever EK wants to do it gets approval from the GCAA. It is almost like a rubber stamp."

We might worry about competition when their fleet is new, but as that fleet ages it will pose safety risks to the travelling public, given GCAA attitudes.

Previous GAMCOesque practices are no longer acceptable in European and North American airspace. In the longer term, unless there is a local seismic shift in compliance attitudes, the 'No-fly Rule' will relieve the competitive threat in the future.

But also consider that foreign employees working for EK (comprising the majority of its staff) do not enjoy any welfare provision from the UAE government. EK has to foot the bill for various welfare services for its staff

I flew EK last year from Dhahran Saudi Arabia thru Dubai to London. I was unimpressed, especially after all the hype about their great service. Seating density in economy on the 777 was extremely tight. At check in, I had requested and was assured that I was in an aisle seat, but was stuck in the middle. My flight attendant was too lazy to get me the the breakfast option of my choice after she ran out on the cart. In fact, she was rude. It took the cabin crew forever to serve drinks after taking off, when everyone was thirsty, and just wanted a drink of water prior to trying to sleep.

I truly agree and not just European carriers..North American ones are pathetic!! I think each and every CEO needs to fly EK to understand "the customer is King" this has got me cringing at the thought of flying any other carrier than EK cover the world and I am all yours EK!!

sorry Mr. Mosley but I'm not buying it. You can't tell me that a government owned airline (which Emirates most definitely is) doesn't benefit from that ownership. And the airport improvements currently underway will, I'm sure, be completely free of any burden on the airlines it serves - unlike the airlines in the rest of the world paying fignificant fees for such upgrades.

Most EK crew are on contracts which allows them quite a bit of latitude. They can keep the crew they like and get rid of the ones they don't. For some reason this drives pro-union people crazy. Is it because this is a service industry and the unions feel entitled to this market? Or is that a business can pick and choose who it wishes to employ at the terms that they are offering?

In addition...the inability to grow airports and the absolutely ridiculous tax structure are killing the European airlines.

What the UK in particular is going to end up with is a large number of unemployed union members. But hey, at least they'll be green.

They don't need unions because they keep their employees happy! Um I worked for two airlines before Emirates both and the US and made wages at poverty level and there was a union. The only think the Unions did was save employees that needed to be fired. Emirates knows if their employees are happy then their guest will be happy. A concept most other airline refuse to acknowledge. They keep their operating cost low by maintaining a new fleet of all wide body aircraft and do most everything in house. They own their cleaners, their catering. I've never seen an airline ran so well and the proof is in the results of its growth!

FRA; CDG; AMS and LHR will become twinkling lights way down below as Dubai becomes the new world hub for international travel.

Why would one fly via Dubai if they can fly non-stop at a competitive price and service point non-stop from a European or American city to Asia?

With the world's airports becoming so huge and such a hassle to deal with, I believe the future lies in point-to-point service --- such as the 787 will provide. This is where the Euro and US carriers have an advantage, as long as 3rd rights are not extended to gulf carriers.

The European long-haul carriers (eg; LH, BA, AF, KL) can count on most of the world's Jews not using any of the Persian Gulf carriers (eg; Qatar, Etihad and Emirates) because we don't want to get stranded in any of these countries or even make a flight change within the airports. When I travel to India I'll stick with BA or LH.

I have traveled with EK three times and was impressed by their services. Anyone complaining about services should try to travel with any American Airline for international travel. American airlines have the worst services. Meals are sporadic, there is too much rationing on everything. Sometimes you stay hungry from Europe to US. Whenever I can, I try to avoid US airlines with international travel.

Well said. They have one extra seat per row in their 7 77s to make 10 abreast-in an aircraft designed for nine abreast! It is impossible for three male pax of normal shoulder width to sit comfortably and if one tries the aisle, the narrow aisle ensures you will be bumpde by every passing person!. You get what you pay for!

Tom, you don't have the facts, my friend. By law, Emirates must provide fully-paid accommodation for its employees and transportation to and from work, as well as meals. In addition to comparable airline travel benefits that extends to families, and cash income that is not subject to local income tax. When you do the math, Emirates' employees wages + legally required "benefits" surpass packages in the west.
As for unions, they may be illegal in the GCC, however, we do enjoy freedom of speech and we do hear from worker groups who are dissatisfied with compensation and/or working conditions. Emirates and airline staff as a whole are not in that group, we never hear complaints from them because they are, overall, quite pleased with their situations.
I would encourage you to get the facts before jumping to conclusions fed by propaganda.

EK will eventually face similar trouble as few big airlines of the past did in the recent times.
It's evident that EK did feel the heat during this recession.
Staff was offered voluntary days off, is just one of the many problems that we dont see so clearly as we are too focussed on the hype that is created on the other hand through media and advertising.
Yes EK has grown but its not all as rosy and thratening as it appears to us.
Asians are the largest workforce in GCC and the biggest chunk of it is in DXB. Asian countries (India, Indonesia,Phillipines) are emerging at a higher speed and this is going grow into ac