Aviation Strategy Issue #208, July/August 2015
Issue no. 208 July/August 2015 North Atlantic: Virtual This issue includes airlines protest too much? Page - of the US carriers’ polical aack on the Gulf super- Atlanc forces 1 connectors has been a new focus on the profitability of the A North Atlanc market, which might just provoke a regulatory re- Davies Commission exposes sponse. pre-funding dilemma 4 At first sight, it is not obvious three JV carriers, with each virtual why the US carriers have chosen airline (Star, SkyTeam and oneworld) Rolls-Royce: Under financial to aack the Gulf carriers so vehe- having varying but generally very pressure, will it be broken mently. There are, remarkably, only high degree of control in their own up? 10 two routes where the US carriers sub-markets (see table, page 2). An aviaon tour of Central compete directly with the Gulf carri- Over the past five years the North Eastern Europe 12 ers: Dubai to Washington (Emirates Atlanc market has been turned into and United) and Milan — New York the major profit generator for both JetBlue: At last, closing the (Emirates, Delta, American), using US and European network carriers. margin gap with peers 17 fih freedom rights. European airlines’ investor presen- Moreover, according to a study taons frequently allude to posive by Oxford Economics commissioned trends in Atlanc unit revenues, by Emirates, the true O&D markets though they have all stopped pro- of the two groups of carriers are viding regional profitability analyses. markedly different. For the Gulf car- The US DoT does compile this data for pean partners which in effect act as riers, the passenger profile is domi- US airlines (Form 41 data), and this one airline on the North Atlanc, nated by Asian, Middle Eastern and illustrates how important the Atlanc coordinang prices and capacity, and African originang or desned pas- has become for the profitability of ulmately sharing profits).
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