Emirates Chairman Says US Airlines Need To Improve Service

A few days ago I wrote a post entitled “Should The Big Three Middle Eastern Airlines Be Stopped?”

The post was about the US airlines complaining that the Middle Eastern Airlines have an unfair advantage:

  • The Open-Skies agreement has exponentially expanded the international airline industry, and this was something largely prompted by the US
  • At the same time, the “big three” US airlines think it’s not fair that the “big three” Middle Eastern airlines aren’t running for profit businesses and have access to a lot more capital and lower operating costs
  • But then again, who are the US airlines to judge what “profit” the Middle Eastern carriers are seeking? Profit doesn’t have to be directly monetary, but rather could be to expand the infrastructure and tourism of a city/country

Emirates-Dubai

Anyway, of Emirates, Etihad, and Qatar, I’ve long said that Emirates is the most “logically” run, and the closest to being run like a for-profit company. Emirates’ CEO Tim Clark, is a brilliant guy, and very much in tune with the industry.

But one guy we don’t hear much from is Emirates’ Chairman, Sheikh Ahmed Bin Saeed Al Maktoum. He’s also a brilliant guy, soft spoken and deliberate as he may be. Bloomberg just published a great story containing an interview with the Emirates Chairman, which includes a 25 minute video.

It gives fascinating insight into how he views the airline, and especially how he views it in relation to his country, US airlines, and even the US.

You can tell that Emirates Airline’s Chairman is almost a polar opposite of Qatar Airways’ CEO. Qatar Airways’ CEO is arguably the most passionate guy in the industry, though loses sight of the big picture and lacks a filter/any discretion.

If you don’t have time to check out the video, I figured I’d very briefly hit on the highlights.

Emirates-Chairman

Why no IPO for Emirates?

If Emirates is profitable, as they claim, why don’t they have an IPO? The reporter suggests this would be the greatest victory in showing the recovery of the Dubai economy and proving that the airline can stand on its own, given how intertwined businesses and the government have historically been in the Emirates. The Chairman’s answer is that it’s not his decision to make and they’re not opposed to it long term, though there’s not much upside either. The airline makes money, he claims, and it’s not like they need the cash.

What’s wrong with US airlines?

His perspective on the whining from US airlines is fascinating, though a bit oversimplified, in my opinion:

“Offer the best to the passengers and people will fly with you,” Sheikh Ahmed said in an interview at his office at Dubai International Airport, which overtook London Heathrow as the world’s top hub by international passengers last year. “They don’t mind paying maybe an extra penny to fly if your service is good, at the end of the day it is all about service.”

While I don’t think he’s completely wrong, I think there’s a lot more to it:

  • The US airlines historically haven’t had nearly the capital of the Middle Eastern carriers — no US airline could afford to order 100 A380s, for example
  • No matter what, the US airlines do have a much higher cost structure than the Middle Eastern carriers, and there’s not much that can be done to fix that
  • Fundamentally I disagree with his thought that it’s all about the experience, at least in economy — time and again we see that economy passengers care about price and schedule, while business/premium travelers care about schedule and product
  • Is Emirates’ product really that great? Yes, they have a lot of bling in first class on their A380, but the backbone of their fleet is the 777, which doesn’t even have flat beds in business class, putting them behind most US airlines in that regard

Emirates-Business-Class
Emirates 777-300ER business class

American-Business-Class
American 777-300ER business class

Is criticism from US airlines fair?

One thing I think he’s spot on about is how interconnected economies are. While the US and European airlines love complaining about the existence of Middle Eastern carriers, all three of them exclusively buy planes from the US and Europe, which contributes massively to their economies. Think of how many jobs have been created from hundreds upon hundreds of aircraft orders. And there’s no arguing that making travel more accessible and direct is ultimately a great thing for the global economy. That’s something all airlines have a stake in.

Bottom line

I really see both sides here. To me this whole argument feels kind of like that one trust fund baby that everyone knew at some point in their childhood. Is it fair they were born with a golden spoon? No. But that’s life, and you have to deal with it. Besides, those people often end up falling flat on their asses. I’m not saying that’s going to happen with the Middle Eastern airlines, but my point is that it’s not their fault they’re in an advantageous situation, in terms of capital, cost structures, etc.

What do you think?

Comments

  1. All profitability motives aside, the U.S. taxpayers subsidize the big 3, which I think is what the U.S. carriers should be focused on ending (and Delta has been to an extent).

  2. screw US airlines for the most part even though I love AA, I hate that a lot of domestic travel involves these horrendous puddle jumper regional jets where you’re crammed in worse than sardines. there’s no concept of biz class on most domestic routes apart from a key flagship ones. and forget “first.”

    US airlines can and will cry foul, all they want — afterall that’s what losers do when they see the end coming. it’s true US taxpayers subsidize a lot of the airlines, it’s true the government gives em tax breaks while the companies MBAs steal more via any loopholes they can find. so it’s akin to crying wolf especially in this day and age where they are making money hand over fist.

    also I really dunno what they’re crying foul over. it’s not like the big 3 are vying for domestic routes. EU has a lot more to worry about than US airlines, least of which are the growing stakes the ME3 have in EU airlines which will no doubt dictate terms in the future.

  3. “They don’t mind paying maybe an extra penny to fly if your service is good, at the end of the day it is all about service.”

    What percentage of AA or Delta’s business is long haul vs. Emirates? I think once you start getting over 4 hours people start to care more about service, comfort and amenities. But, under 4 hours it’s all about price and schedule.

  4. Oh yes I total agree – I always wonder why service on long flight 3-5 hours in North America is almost NON EXCIST.

    MLA-LCA-EK Y – 2 HOURS 10 MIN – Great service –menucard-hot towel-great food-free wine.
    YYC-ORD-UA –F – 3 HOUS 15 MIN – Free drink in plastic glass and free Chips (value 8 usd)
    FRA-STR-LH-C- 50 MIN – Amazing service – BOX of 4 diff types of food (tapas style) – IceCream – drink and yes on exstremely short flight.
    Lots of short flight in Europe – Y – service is amazing with free drink-hot meala (Aegean) –free Sandwich – great coffee (AUSTRIAN-SWISS-GERMANWINGS-NIKI).
    YES both Asia and mostly European airlines give amazing service even in Economy
    Have lots of more examples for that if anybody has interess.

  5. Emirates can create a super blingy posh first class, but is their coach class any better than the major US carrier’s coach on equivalent aircraft? Judging by comments and seat maps on seatguru, the answer is “no”. Emirates’ A380 coach configuration looks positively slave ship. So does Etihad’s. And aren’t the coach fares really how the airlines make their money? Maybe I’m wrong, don’t flame me too badly if you disagree with me. lol

  6. I have been up to this point quite loyal to US carriers, but since they have mostly gone revenue based etc and are generally gutting their award charts and frequent flier benefits, I feel I will be trying out the M3 and other carriers quite soon.

  7. @tara – yes, their coach class is better than the major US carrier’s coach on equivalent aircraft, which in this case is the 777. While the 3-4-3 configuration is no doubt tight, it goes much further than seat maps. You have probably the best IFE in the sky, you receive decent quality airline food with menu cards, snacks in the middle of flights, a much higher level of service that is given from significantly younger, more energetic, and quite frankly better looking flight attendants than you see on US airlines. Of course many people will see it as them having a hiring standard that does not treat everyone equally as they’re literally recruiting younger individuals, but on my recent DL and AA international flights it sort of drags down the service when Betty who is a couple flights away from retirement along with her senior staff of which the youngest might be 40 are taking care of you. What Emirates and ME do with their overall service in Coach/Economy (overall service = not just the seat) is simply better. And when it comes to price, you’ll find that it’s cheaper to fly EK or any other ME3 than it is similar routes served by airlines in the US and in Europe.

    Most of these airlines protesting aren’t happy about the JFK-MXP route which they compete on with EK. When you have $400 RT special fares, and normal fares which are competitive with DL/UA/AA on that route…why would a person want to pick a US airline over EK? I often find it funny when there are threads in forums that praise the service EK gives its passengers in coach, there is always one or two that come out and say “it wasn’t that great” and “its no different than US airlines”…you have to be kidding me. There is a difference, and that’s why EK and ME3 are consistently ranked in the worlds best airlines time and time again, you don’t even see DL/UA/AA in the top 20…top 30..maybe top 40? My comments are based solely on the experience I’ve had and what others that have actually flown ME3 and a US airline have to say. Not everyone has the most positive experiences, but I can say that there is difference in service levels and it’s noticeable.

  8. Stylo4444, your comment is not in agreement with what I read on the ‘net. I see complaints about cramped seats, crappy meals, and poor service for Etihad coach just like I see for the US and European airlines’ coach.

  9. tara its all about perspective… just like there are folks in the US who think life sucks while there are resilient people who thrive in sub-saharan africa.

    so to better emphasize this point, not all complaints are equal. there’s a world of diff between US airlines seats and service, compared to the ME3 or the asian carriers. try it for yourself to compare what you’re missing out on, dont read the BS groucho folks who complain about post.

  10. I’ve flown long haul economy comfort on Delta and on regular coach on Air New Zealand. The difference is obvious from the second you step on the plane. Delta’s crew seemed a bit older and looked like they were bracing themselves for the coming 15 hour flight rather than welcoming passengers aboard. I understand we’re not supposed to expect luxury in coach, but relative comfort and friendliness should be expected. The plane was still a little dirty from its previous run, the seats were worn, and my IFE had a large scratch on the screen. The food was obviously inedible (most coach airplane food is, so no surprise there).

    Now, with Air New Zealand, the crew was young and energetic, seemingly excited for the coming journey. The plane was open, airy and felt very new. The seats were chic and the IFE appeared state of the art. The food, to my surprise, was actually pretty solid – for airplane food AND coach. Service always came with a smile and it seemed like the crew made an effort to keep the bathrooms clean throughout the 15 hours.

    My sister, who lives in New Zealand and returns state side frequently, trying out various carriers, has tried Qantas as well, but she says that Air New Zealand is her favorite thanks to the friendliness and quality of service. I can attest to the fact that, although you’re not going to get business class treatment, they won’t treat you with contempt if you’re not in a premium cabin the way many US airlines do.

    I’d take regular economy on Air New Zealand for 15 hours than Economy Comfort on Delta any day after having flown the two.

    If you want to fly the same routes as international carriers, you should have a quality of service that competes with them if you want your customer base to remain loyal. Wanna roll with the big dogs, step up your game.

  11. @Tara: I can’t speak for Etihad, but Emirates is very, very good in economy.

    I have flown EK LAX-DXB, DXB-SEA, ICN-DXB, and DXB-JFK on a combination of 777 and A380 equipment. It isn’t ultra-luxury by any means, but after the first flight I didn’t dread the other trips. Pitch is decent, recline is generous, food is very good (and includes metal utensils.) You can tell that some careful consideration went into the design of the cabin — it doesn’t feel like a flying version of an ACME brand experience. On top of that, IFE was great. I never got bored during any of the flights. If I wasn’t sleeping, there was a ton of content to keep entertained.

    The biggest issues that I noticed were that the lavs tended to get fairly trashed during the flights, and on one flight there was an extended family flying with a bunch of kids and they weren’t exactly polite in how they were discarding trash and service items, and they tended to let the kids run wild.

    Overall I enjoyed my flights… You should give Emirates (or any of the other carriers) a try for yourself before passing judgement.

  12. Every one who came to the U.S. from Asia and Europe would agree that the U.S. airlines consistently provide the worst service. The difference is so obvious in all aspects, and the reason behind is that the U.S. domestic market is larger enough, and air travel is really not about comfort but solely about getting from place A to place B.

  13. Being based in Dubai, most of my flying is done on the “Big Three ME” carriers, but mostly on Emirates. The planes themselves vary from mediacore (if flying on the Airbus 330’s) to great on the A380. The Service is good to great regardless of plane type.

    I fly economy 70% of the time and Business 30% of the time, I can attest that when flying long haul, especially on the A380, I will search the EK options before any other airline.The A380 is so quite, comfortable, and seat pitch in Economy is similar to Premium Economy on other airlines. Even some short flights like to Kuwait or Jeddah get the flagship plane and service which are 1 hour and 2 hours respectively. Im not aware of any similar setup on the US carriers.

    Keep in mind that Emirates from Dubai is almost always the most expensive option, yet Im willing to pay slightly more for what I get, so I agree with the Ek Chairman’s comment.

  14. “why don’t they have an IPO?”

    The ostensible purpose of an IPO is to raise funds to further develop a business. Clearly access to funds is not something Emirates has a problem with, so why bother?

  15. Generally US service levels are way behind almost any other airlines. Recently I have been on a couple of US carriers. Experience is not as standard as with eg SQ. A few flights were quite good, with a friendly crew, but 2 flights were bad with a crew that does not deserve that name. One guy was particularly disgusting, explaining to a little old lady who needed a bit of help putting her bag in the overhead bin that it was his right not to help as insurance would not pay him if he would get injured doing so.

  16. Last year, I flew EWR-DEL on United in Coach. I bought the extra leg room – 4 inches – seat.. Whoopee!

    The service SUCKED big time. The flight attendants are just not interested in making feel passengers welcomed. For dinner, the attendant barked – chicken or vegetarian? When I asked her what the vegetarian choice was – she barked back – it’s Indian vegetarian! Like I’m some idiot.

    I avoid US airlines for long haul international travel whenever I can.

    Tomorrow we fly JFK-MXP. We spent $1,500 on Alitalia’s premium economy than $650 on United/Delta/American coach.

    The guy is right – a lot of folks will pay more for service (not that I know Alitalia has service – it will be the first time we will fly them).

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