Delta Air Lines exits Dubai as Air Canada arrives. The impact of open skies vs protectionism

For Delta Air Lines, withdrawal from its Dubai route is purely due to the impact open skies has had in unleashing capacity (which it calls subsidised) and hubs it cannot compete with. Delta announced on 28-Oct-2015 that it is withdrawing its sole Middle East route, Atlanta-Dubai. Delta does not however suggest the route is unprofitable; indeed an Emirates calculation suggests Delta would conservatively have been clearing "a route net margin" of 7% - near to twice the global average. The Gulf carrier speculates that Delta would prefer to place the Dubai route's aircraft on the higher margin US-European JV flights operated with anti-trust immunity.

Meanwhile, overtly protectionist Air Canada is moving in the opposite direction, on 03-Nov-2015 commencing service to Dubai and on 01-Nov-2015 to Delhi.

Delta's cancelled Dubai flight and Air Canada's new one are services to the epicentre of the new world's hub. Dubai presents the opportunities across the region but also the formidable size of Emirates, which seized the moment before others woke up. Air Canada has relative confidence as its government, unlike most others, has blocked Gulf carrier competition. For consumers open skies in the US has delivered extensive benefits while protectionism in Canada is limiting travel options and the economy.