Yeah, the US3vME3 subsidy fight is getting even more strange, and I wasn’t so sure that was possible. Delta is cutting its Dubai flight effective 11 February 2016 and it is going out in style, lashing out at the ME3 carriers and doubling down on the subsidy claims.
The headline is a great one: “Subsidized Gulf carrier competition forces Delta to cancel ATL-Dubai” and the content of the release is even better. Here’s an excerpt from the “news” site at Delta:
The announcement comes amid overcapacity on U.S. routes to the Middle East operated by government-owned and heavily subsidized airlines…
The 777 aircraft used to operate ATL-DXB will be redeployed to other Trans-Atlantic markets where it can compete on a level playing field that’s not distorted by subsidized state-owned airlines.
There’s also a great statistic which explains why operating the route is somewhat foolhardy for Delta (and arguably United, too):
Between 2008 and 2014, about 11,000 daily seats were added between the U.S. and Dubai, Doha, and Abu Dhabi …Despite the increase in passengers traveling on these flights, the number whose journeys actually originate or end in the Gulf has essentially remained flat.
No surprise here at all. Delta has zero feed at the Dubai end of the operation. United has minimal feed from flyDubai. And passengers are not going to the Middle East; the vast majority are connecting onward to India, Africa and Asia. And it is WAY more efficient to do that via the Middle East than via Europe in most cases. The ME3 carriers pick up that connecting traffic and happen to also pick up the O/D passengers into their hubs, too, thanks to more flights from more departure points. There is not even service from the ME3 hubs to Atlanta yet; Qatar Airways will be the first in mid-2016.
That’s not a subsidy question; it is a route network question. And in that part of the world the US carriers simply do not compete.
But they continue to beat the “subsidy” war drum, presuming that eventually someone is going to believe the claims, despite a lack of action from the feds, other than to investigate the US3 for collusion and price fixing. Oops.
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Going to add load to the UA IAD-DXB route. From my perspective the good chance of the upgrade is only reason to fly that route on UA. The additional connection to west coast is soul destroying after a long flight. May mean for me that I also take the direct route in ME carriers. Not whining at UA here, as I am sure they will rejoice at reduced DL competition, but noting an impact to me.
Personally, I blame Jennifer Anniston…
While I agree with you overall that is the route which is causing US carriers pain, I question whether the ME3 are carrying passengers from US to Asia. India is probably the furthest easy that really makes sense. From South east Asia and further east, it makes no sense to fly via the middle east. Much shorter, faster and generally cheaper to fly over the Pacific. No?
Very few go on to SE Asia. Those headed to Central Asia and the Sub-continent are, by far, the biggest pool of passengers.
Had to Google what Central Asia is! Doesn’t look like there would be a whole lot of traffic going to those countries. .. are there any numbers available?
I guess the bulk would be the Indian subcontinent. .
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