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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