Emirates President Talks Open Skies and Airline Subsidies

The Emirates boss spoke forcefully about the open skies row, in which the American carriers have claimed that Emirates, Etihad and Qatar have all received $44 billion in subsidies from their governments, and are planning to seek US government action against them.

Emirates President and CEO, Tim Clark has said in an interview with The National that he is refocusing on the war of words between some in the US aviation industry, including American, United and Delta Air Lines and Arabian Gulf Carriers over the open skies agreements.

The Emirates boss spoke forcefully about the open skies row, in which the American carriers have claimed that Emirates, Etihad and Qatar have all received $44 billion in subsidies from their governments, and are planning to seek US government action against them.

According to Mr Clark in the interview with The National, the airline received a number of suggestions that the American carriers were preparing a report of allegations last year, before they appeared in January.

“For two years they hired an army of private investigators – they’re so proud of their gumshoes – to dig the dirt on us at vast expense to their shareholders and spread it around,” he said.

When the first white paper came out, the Middle Eastern carriers were amazed, as there was no attribution or sourcing in the paper whatsoever, according to Mr Clark.

“I don’t think they’ve broken any laws in compiling it, but all three have got antitrust immunity in the US and you might question how they can act in collusion on a matter like this. It’s at least contrary to the spirit of antitrust legislation, and we might take that up with the US authorities,” he added.

In terms of open skies agreement, Mr Clark told The National  that in 1999, only two regional carriers were interested in open skies – Gulf Air and Emirates. Gulf Air was owned by the government in 1999 and so was subsidised, which “didn’t seem a problem back then.”

There are currently 144 open skies agreements in the world now, and according to Mr Clark, many of the carriers involved in these deals had been state-owned or had state aid from previous regimes.

“For a viable open skies policy you need long-range aeroplanes – the A380 is the perfect plane for this – and a region that in policy terms looks to serve demand, not just adhere to an outdated air-services agreement. The deal with the US was the jewel in the crown of our open skies policy, and is still a very important part of the strategy,” he added in the interview with The National.

Regarding subsidies to US airlines, the Emirates boss said that they had received material evidence that the US airline industry was in receipt of billions of dollars of subsidy over many years - $155bn in the last century, according to an official report by US authorities.

“This was in addition to the Chapter 11 assistance. They said it was all OK because Chapter 11 made it legal, but that’s a ridiculous argument,” he said.

The Europeans (apart from Air France/KLM and Lufthansa) are apparently less keen on protectionism, and airports such as Copenhagen are spending money to be able to accommodate A380s – suggesting that the Gulf carriers such as Emirates are welcome in Europe.

“We were asked by the Italian government to take over the Malpensa [Milan] operation, which was how Milan to New York began. Milan was so badly served by the US carriers it made sense to put in a proper product at the right price,” he added in his interview with The National.

You can read the full interview with the Emirates president, Tim Clark on The National’s website, here.

 


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