3 Links I Love: Middle East 5th Freedoms, Expanding Blocks, Plane Names

This week’s featured link:
American CEO Says Mideast Carriers Should End Europe-U.S. Flights – TheStreet
American CEO Doug Parker finally gets to the crux of the concern about Middle East carriers. Forget about flying through the Middle East airlines’ hubs. The big worry is that they’ll start flying to the US from Europe and Asia over time, using their lower cost structures to undercut existing carriers.

Links I Love

Two for the road:
Airlines say scheduling block time changes mask system inefficiencies – ATW
We’ve talked about this here before. Airlines like United may be showing record on-time performance, but that’s because they’re padding their schedules more. This is a temporary solution that helps keep planes arriving on time, but it can’t be a permanent solution. Things will need to change.

Why Airlines Give Planes Unusual Names – Condé Nast Traveler
Here’s a fun piece talking about the time-honored tradition of naming aircraft. Not enough airlines do it anymore, sadly.

Brett

24 responses to “3 Links I Love: Middle East 5th Freedoms, Expanding Blocks, Plane Names”

Oliver

Sep 16, 2016

Wonder what Delta and United think about 5th freedom rights (*cough* NRT *cough*)

How did Emirates end up with the Milan/JFK rights in the first place?

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1. CF
  
  Sep 16, 2016
  
  Oliver – Well, the open skies agreements permitted the fifth freedom operation.
  
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  1. Dan
    
    Sep 16, 2016
    
    Can you do a piece about fifth freedom rights, what they allow, and when? IOW, could an ME carrier start something today resembling DL/NW’s legacy NRT hub?
    
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    1. CF
      
      Sep 16, 2016
      
      Dan – In theory Emirates could do that if it has an agreement with the country in which it wanted to hub and the country to which it wanted to fly. It’s already done a bit of that in Australia from where it flies to several points in NZ.
      
      Reply
  2. USBT
    
    Sep 16, 2016
    
    The Italian government had to approve the MXP-JFK fifth freedom. The US and UAE have Open Skies, and the US and EU. But the EU and UAE don’t so it was subject to the Italian government approval, which they controversially gave.
    
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David SF eastbay

Sep 16, 2016

So it’s okay for the U.S. carriers to have fifth freedom rights but not the ME3 carriers, right that makes sense and doesn’t make the U.S. carriers look stupid. Why is it the U.S. carriers remind me of whiny children for some reason?

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1. Alex Hill
  
  Sep 16, 2016
  
  First of all, AA (the airline most explicitly arguing against 5th freedom flights) doesn’t have any fifth freedom flights.
  
  More substantively, the UA and DL fifth freedom flights are very different from the ME3 in that they’re mostly about serving traffic to/from the US, and their NRT hubs date to a time when nonstop flights from the US to the more-distant parts of Asia were not economically feasible (if they were even possible). Local traffic is a supplement that helps make the flights viable but not the reason those fifth freedom flights exist. The ME3 fifth freedom flights (with the exception of flights like SYD-AKL which aren’t relevant here) are not about serving traffic to, from, or through their home countries.
  
  That said, I mostly think that competition is a good thing. However, I think that the ME3 should be subject to labor standards of the US or Europe if they’re operating flights that are mostly about serving the US-Europe local market. No dismissing flight attendants because they get married, reach age 28, or no longer look pretty, for example. And no requiring flight crews to live in airline-designated housing with the airline or its regressive host country having a say over what they do in their free time. All that in addition to the obvious: salaries, pensions, benefits, etc.
  
  It’s not fair to make the US3 and the European airlines compete with airlines with labor standards that are illegal or uncompetitive in the US or EU. (Note that I would never, ever hold up the US as an example of acceptable labor standards, but we’re better than Qatar in most ways.)
  
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  1. USBT
    
    Sep 16, 2016
    
    “More substantively, the UA and DL fifth freedom flights are very different from the ME3 in that they’re mostly about serving traffic to/from the US, and their NRT hubs date to a time when nonstop flights from the US to the more-distant parts of Asia were not economically feasible (if they were even possible).”
    —————–
    The operative words there are ” a time when nonstop flights from the US to the more-distant parts of Asia were not economically feasible”. They are economically feasible now, as United has demonstrated with SFO-SIN non stop. So the >need< for fifth freedoms beyond Tokyo is no longer there.
    
    Of course United hasn't ended its fifth freedoms, as it still has one on HKG-SIN and NRT-ICN (NRT-ICN on a 737 is only because ANA doesn't fly that route).
    
    Reply
    1. Alex Hill
      
      Sep 17, 2016
      
      But United and Delta have both significantly cut back on their 5th freedom flights, an AA has completely eliminated them.
      
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  2. Johhny
    
    Sep 16, 2016
    
    AA has plenty of 5th freedom rights, they haven’t flown any of them since they stopped flying ZRH-TXL back in the mid 90’s, however.
    
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    1. Alex Hill
      
      Sep 17, 2016
      
      AA has rights, but no flights, so they have very little reason to care about protecting their own 5th freedom rights.
      
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Bill Hough

Sep 16, 2016

RE: Dougie hates ME3 5th freedom rights: Boo Hoo.

RE: Plane names: Good article on a good trend.

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Zack Rules

Sep 16, 2016

I have always thought that the beef the big three had with the Middle East carriers was that they were taking away pax from their European partners. Instead of flying LAX-AMS-ACC, LAX-DXB-ACC is now an option. For the past decade or two, US and EU carriers with JV’s/codeshares have had a lock on those kinds of trips but the Middle Eastern carriers now compete in that same space. It is not to say that US-EU carriers can’t compete in that space, those European hubs are still well-positioned for connections and still have massive feed in the US, it more that the US-EU carriers no longer have a monopoly on those kinds of trips.

While Parker calls fifth freedom their biggest concern, I think this is overblown because most of the fifth freedom routes that will ultimately open up to the Middle East carriers are routes that US and EU carriers don’t fly anyways because the passenger volumes are too small. Emirates has talked about adding Budapest-US flights, a route that no US or EU airline flies. Think routes like Brussels-Los Angeles, Zurich-Mexico City, Prague-Chicago or Madrid-Seattle. They won’t open up busier routes like JFK-London or Paris-Washington.

And if Delta really wanted to fly USG personnel from JFK to Milan, they should have underbid JetBlue. GSA almost always picks the lowest fare to save taxpayers’ money. Why should US taxpayers subsidize Delta to fly USG personnel to Milan?

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1. Nathaniel
  
  Sep 17, 2016
  
  “They won’t open up busier routes like JFK-London or Paris-Washington.”
  
  Buwahahahahaha
  
  You’re kidding, right?
  If they could get the clearance they would do it in a heartbeat. Especially if they could use a Jet Blue or Frontier or Alaska code on the flight to become eligible for government contracts.
  
  I am not an industry expert by any means, and I didn’t even sleep at a Holiday Inn Express last night, but from my outside observation JFK-LHR IS the prestige flight in international travel. Part of that is because it’s probably the most accessible to the masses. A low fare on an Emirates 380 means a higher fare on that once in a lifetime business fare trip to an exotic destination. The ME3 are absolutely gunning for these routes.
  
  “And if Delta really wanted to fly USG personnel from JFK to Milan, they should have underbid JetBlue. GSA almost always picks the lowest fare to save taxpayers’ money. Why should US taxpayers subsidize Delta to fly USG personnel to Milan?”
  
  Quite simply? Delta can’t. The cost to Jet Blue on this is exactly $0.00. They go to Emirates say, “How much do you want to lose?” and bid that. They then take their cut off the top of every ticket sold. It a huge win for Jet Blue and I would be shocked if the guys at the other ME3 aren’t trying to talk to other U.S. carriers, like Frontier or Alaska, to do the same thing..
  
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Eric C

Sep 16, 2016

Just how much investment has the gulf put in to their airlines? They have two huge new airports (DOH, DWC) each with palatial terminals, two huge new terminals at existing airports (AUH, DXB), the cost of which is borne mostly by the governments and foreign airlines as connecting passengers don’t pay airport fees. I’d be surprised if the Gulf governments haven’t invested more into its 4 main airports that the US government has in to its hundreds. That’s all before you get to anything about direct subsidies, friendly tax terms, and interest-free loans. If I were a US carrier yeah I’d be pretty hard up competing against that. Here we have airlines occasionally lobbying against airport improvements because they know they’ll have to foot the bill themselves.

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1. David SF eastbay
  
  Sep 16, 2016
  
  AUH/DXB do have a departure fee now which also applies to transit passengers. It’s AED35 which is about $10.00. It’s coded F6 on your ticket. With the amount of people connecting in the UAE, that adds up.
  
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2. Fitz
  
  Sep 18, 2016
  
  The Gulf airlines are all State subsidised … They do not operate on a level playing field … The are gradually undercutting our airlines in the West -Molokai at troubled Quantas and all the euro lines … BAN EMIRATES, QATAR, GULF, ETIHAD ETC ETC WHEN THEY OPERATE SUBSIDISED LOSS MAKING FLIGHTS …
  
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Kilroy

Sep 16, 2016

As a consumer, I welcome foreign airlines into the US with open arms, no matter where they are flying to or from, and wish that they were allowed to fly domestically within the US.

I have never been impressed with the service on US airlines (on any of them), and have received better service on 3rd world airlines (e.g., Lloyd Aereo Boliviano, from LPB to EZE) than I have on any US airline.

Let airlines like Singapore Air and Cathay Pacific come in and fly from LAX to JFK, and see what happens.

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1. Tim Dunn
  
  Sep 16, 2016
  
  I can assure you that no foreign airline could provide service as good as the ones you note if it has to pay and abide by US or European labor costs and practices. How many 65 year old FAs have you seen on Singapore? The only reason why the US low cost carriers have lower costs is because they have far fewer employees at top of scale. Lower costs support growth which keeps costs down
  I as an American am not willing to allow foreign companies to destroy the US airline industry by using labor costs and techniques that are incompatible with US labor laws. If a US based company can provide better service and work within the US labor system, then more competition is good.
  
  The ME3 succeed in the US and Europe by touting all of the aircraft they buy. They know they are destroying US airline jobs but think they are justified by the billions they spend on aircraft. Until there is clear evidence that the ME3 is cutting massive amounts of US jobs, nothing will change. A frog will jump out of a pot of boiling water but can be turned into soup by a gradual increase in temperature
  
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  1. Johhny
    
    Sep 16, 2016
    
    No need to allow foreign companies to destroy the US airline industry. They are doing a good job of it all by themselves.
    
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    1. Oliver
      
      Sep 16, 2016
      
      We are in the year 2016. The US carriers are all profitable.
      
      Reply
southbay flier

Sep 17, 2016

I always figured this is why the US3 were so adamant against allowing the ME3 access to the US market. I don’t think they really cared as much about flights to DXB, DOH, or AUH. If they start US – Europe or US – Asia with their government subsidies and cheaper labor, then the European, Asian, and American carriers will be in trouble.

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Aussie flyer

Sep 20, 2016

As am Australian I greatly prefer to catch Emirates when flying from Melbourne to Auckland. Emirates fly an a380 across the tasman while Air NZ/Qantas/Virgin Australia/… have us in a clapped out 737….No wonder they are stealing market share.

Bring on more liberalisation – the US airlines could benefit from more competition

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1. CF
  
  Sep 20, 2016
  
  Might want to look again. Air NZ flies a 777 and a 767-300 on Melbourne to Auckland. Not a bad option to consider.
  
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