Delta Cancels Dubai Flights, Blames Gulf Carriers

What does their profitability have to do with anything? Airlines don't get profitable by losing money on routes and if Delta is losing money on the flight, there is no reason not to cancel it, no matter how much they are making with their other 5,400 flights.
Pointing out that they are profitable just shows the weakness of the argument since company profitability has absolutely nothing to do with ATL-DXB.

Impressively strong conclusions on your part. Especially when you absolutely no data or inside knowlege of the route's perfomance. Delusional is the correct assessment. You applied to wrong party.

You write as if anybody wanted to ride Delta to Dubai in the first place 😛

Is it safe to start calling Delta, Drama Airlines?

Lucky, did you hear the United will also be canceling their flight to Kuwait? Granted, not that you'd miss it, but still interesting.

"Especially when you absolutely no data or inside knowlege of the route’s performance"

Um, he quoted a source stating seating capacity at 85%...

DL's PR machine is going into overdrive today with their A4A departure. I wonder how much their side of the anti-ME3 rhetoric will increase now they aren't burdened whatsoever by dissenters. I think DL's citation of FAA privatization is merely lip service (this will never happen in a post-9/11 security environment), as it really seems the ExIm Bank battle combined with the subsidy accusations drove this.

Also, I would be curious to see DL's data citing flat tourism numbers between the US and the Gulf states - that seems ridiculous given how much tourism has grown overall in the Gulf market (add in the fact that a strong dollar means nothing for UAE-US travel given the AED is pegged...).

Delta supports terrorists and is unAmerican.

Delta sucks... They always have. Do I still fly them when I need to? Sure... but this political play is just silly, especially eating that the data shows that the planes were typically flying at 85%+ capacity. Seems like a profitable route! Although with Qatar and probably other Gulf airlines coming to Atlanta, why would you WANT to fly Delta to Dubai? Everyone knows the flight experience on those airlines would be way better by a long shot! The elites will be bummed I guess, but that's about it.

So is this Delta's brat-like tirade to pull out of direct DXB service so no one can compare them to a superior product from the soon-to-arrive ME3? Is Delta scared?

@wwk5d says: "Um, he quoted a source stating seating capacity at 85%…"

Please enlighten us all in how load factor equals profitability.

I never said that had anything to do with profitability, nimrod. Especially since you never said Lucky didn't provide anything about profitability. You said:

"Especially when you absolutely no data or inside knowlege of the route’s perfomance"

He provided data on the route's performance. It was averaging 85% loads. The load factor is one aspect of a route's performance. Maybe you'd understand it better if I used sock puppets?

The over capacity mentioned in the blog-post, can be confirmed. I was traveling with SAS on one of the last flights out of Houston (IAH), and I overheard the ground handlers from EK (Emirates), and they were talking of approx. 50% free seats on the IAH-DXB departure with an A380, that should be approx. 270 available seats on a Sunday evening.
I think maintaining the slots within the US airports, is far more important, than making huge profits on the flights.

And this is the key point "Despite the increase in passengers traveling on these flights, the number whose journeys actually originate or end in the Gulf has essentially remained flat.".

With little or no feed in DXB DL is going to have a hard time competing with an another airlines home hub on this route.

Delta do better! Your business class product is not up to par, and thanks to the reduction in the Alaska-Delta relationship, Emirates is looking better than ever.

@No Name

Exactly. Delta 'opportunistically' flew that route (since they have trivially inconsequential onward feed from that connection anyway) while oil prices were high and the region was resurgent. But, like UA from IAH to Lagos, as oil revenues have been clobbered, so goes the traffic. It's economics and it makes sense that the ME3 will do better on that route anyway.

Of course, Sir Richard the Gizzard-Hearted blames "uneven playing field" or whatever. Another Delta "Got Your Back" PR release...Right. All I hear is what Charlie Brown heard when his teacher talked.... "Blah-Blah-Blah."

If Delta was actually losing money on this route, they absolutely would have included that data in their press release. This is purely a political move to boost their anti-ME3 message. EK should apply to start service to ATL tomorrow. UA should also take this opportunity to show that they manage to fill a Dubai flight with 90%+ load factors (I fly IAD-DXB on UA frequently and it's often oversold) despite having direct competition on the route.

@Doug — So you're suggesting that Delta would cut a profitable route just to make a point? Give me a break. Either the route is unprofitable outright, or it is marginally profitable and Delta believes it could make more money redeploying its 777 elsewhere. Delta didn't become the most profitable airline in the world by acting irrationally.

There are all kinds of factors involved here but I would say the most important is that the ME3 can all feed into DXB and run full flights to the ATL but Delta cant and its not like Dubai or anywhere in the region really is a big destination for americans either. Throw in subsidies, newer/nicer planes and whatever else and its just not an attractive route for delta.

It sounds to me that Delta has a solid argument. People are flocking to gulf airlines because they offer more than delta at a lower price. Delta is saying that this better service is unfairly achieved thru subsidies. Therefore Delta argues that the playing field is not equal, which seems reasonable.

If delta were to match gulf airlines in quality and cost, it would not be profitable for delta. They only reason it is profitable for gulf airlines to offer such high level of service at the current cost structure is beside they are being heavily subsidized.

I believe delta is in the right here.

I have tried for about 4 years to use my Delta Skymiles for a Business class ticket to Dubai. It has NEVER been available. I even called the Skymiles rez line and made the agent look forward at each day for the next 9 months looking for availability. She also found none. She told me the flight is usually sold out and they don't have "many" free business class seats. Looks like whining about the ME3 carrier competition to me. Delta did just drop out of the Airlines for America Alliance after they didn't support the US carriers complaints about unfair competition. Coincidence? I doubt it.

Time to expand the vocabulary beyond "egregious".

@ Mark S

I don't see the correlation in that Delta had no competition on the route anyway. So it seems weird to blame the ME3 on a route that Delta had to itself. Now, I think the prospect that they MIGHT have competition on that route someday may have driven them to preemptively exit-- And, bully for them for moving the 777 to another route than can make more money.

But, to blame the ME3 that doesn't even FLY that route today is surreal. Classic Delta. By which I mean "surreal".

@Edub

"I have tried for about 4 years to use my Delta Skymiles for a Business class ticket to Dubai. It has NEVER been available. "

They don't call them SkyPesos for nothing-- pesos would be equally useful to you in getting a seat on that route.

Which is another way to look at the lie-that-defines-Delta. They 'claim' the route was unprofitable, which translates into low load factors and lots of empty seats. Yet, the powers-that-be at Delta can't see the wisdom of burning off some of the imputed liabilities on the balance sheet by letting SkyMiles members burn off a few miles (well, a lot) simply by occupying a seat that was going out empty anyway.

"Delta" is Cajun for "Lose-Lose".

@Adam

"It sounds to me that Delta has a solid argument. People are flocking to gulf airlines because they offer more than delta at a lower price. Delta is saying that this better service is unfairly achieved thru subsidies. Therefore Delta argues that the playing field is not equal, which seems reasonable."

You perhaps haven't looked at the corporate finance behind this, but it boils down to some of the equity of the Gulf Carriers being held by sovereign wealth funds (so, it's not actually an ongoing 'subsidy' in terms of allowing ME3 to run losses). It turns out those wealth funds like to make money too-- the ME3 run very solid operations, with lower costs in some regions. The savings go into newer planes and better onboard amenities.

Guess what? Some Delta stock is also owned by sovereign wealth funds.
Delta flushed it's common stock, with liberal bankruptcy laws, to fund its current operations on the backs of shareholders it sent down the toilet.
Delta takes advantage of lavish tax treatment and very advantageous use of infrastructure funded by taxpayers at the local, state and national level.

The 'subsidy' that Anderson prattles on about is far from a forgone conclusion.

And, being the prosecuting attorney Anderson is, every one of these dramatic pronouncements sounds like a "if the glove don't fit you must acquit" thing. If you follow the logic it's always got holes in it. Big holes.

So, you have to translate from Anderson-isms:
"At Delta I'll make sure we always have your backs" really means, in un-legal form,
"If we could stuff you d-bags in the cargo hold and haul goats up here to make more money, we would".

This argument is close to my heart as I fly between the middle east and U.S every six weeks and have been doing so for 5 years. I have tried many different routes on many airlines. The bottom line is this. I choose not to fly with U.S carriers because of awful standard of service old 'crappy' aircraft and straight up rude staff. If Emirates quit flying daily to SFO or LAX I'm sure Delta would not fill the slot. And one last comment on Delta's international routes: I also fly to the Philippines, compare Cathy Pacific to Delta! I've seen fare differences of almost 800USD more on Delta.

I was reading the Khaleej Times in Dubai this evening and there was an article about the European airline industry complaining about the Gulf carriers. I wonder what your take on that would be.

I have been flying ATL-DXB for over 10 years and mostly on Delta. Emirates provided the regional connections.
Delta's CEO is just not telling the truth. Their planes run a near 100% load factor. You can't get upgrades and you can't get points seats unless you give delta 300k plus points. When asked the answer is always "revenue hasn't released any seats". This 10 mounths out. If Delta is losing money on this route. They can't blame the load factor or the ME3.

Delta has dropped AMM, CAI. CPH and other places I fly. They also don't care anything about longtime, million milers. It is all about how much have I made off you today. The "new" three class service, trying to turn Economy Comfort, or what ever they have rebranded it today, into the next business class is just another example of charging more for less.

Enough of my rant. Delta has done this to themselves. They can't blame ME3. All the Government employees and contractors that provide guaranteed revenue are not a subsidy the ME3 get.

My February trip is now on Emirates.

Wizzo

Well said Wizzo and I agree 100%! I too live in this part of the world and the Delta flight from Dubai to Atlanta is ALWAYS full, as in almost no seats available. We have been flying this route for six years, multiple times a year. I don't see how Delta is losing money.