Etihad Denies US Lobby $2.5bn Subsidy Accusation

The Partnership for Open and Fair Skies issued a statement earlier this week with supporting document which it claims shows that the Abu Dhabi-based airline received a cash injection of $2.5 billion in 2014 from the government.

Etihad Airways has denied recent accusations from a United States lobby group that it received US$2.5 billion in state subsidies last year, as the spat between the Big Three in the Gulf and the US continues to intensify.

The Partnership for Open and Fair Skies issued a statement earlier this week with supporting document which it claims shows that the Abu Dhabi-based airline received a cash injection of $2.5 billion in 2014 from the government.

The Partnership is led by the three biggest US carriers – American Airlines, Delta Air lines and United Airlines, alongside several unions.

“We have never made any secret of the fact that we have received equity capital and loans from our shareholder,” said an Etihad spokesperson. “That is completely normal for any business which has significant long-term capital commitments, for example for aircraft deposits. Etihad Airways’ accounts are audited by KPMG and are fully compliant with international financial reporting standards.”

Since January this year, the Big Three US carriers have been involved in a very public spat with Qatar Airways, Emirates Airways and Etihad Airways over accusations of unfair competition. The issue is threatening the open skies policy between the US and Arabian Gulf countries.

Overall, the US airlines have alleged that the three Gulf carriers have received over $42 billion over the past ten years in government subsidies, which have allowed them to compete unfairly.

Etihad’s overall profit last year soared to $73 million – a 52 percent increase in comparison to the previous year, thanks to both passenger and cargo growth.

“Etihad’s own financials prove that it is not a commercially viable enterprise and owes its continued existence to massive government subsidies from the United Arab Emirates,” said the partnership.

The US airlines have urged the Obama administration to review the government subsidy deals and block the Gulf rivals from receiving any additional capacity. Despite the findings, the Gulf airlines still oppose the allegations, stating that the US carriers are only acting to protect their market share. Etihad has hit back at the US airlines by claiming they have received more than $70 billion in government benefits since the year 2000.

Earlier this year, the US Department of State, Commerce and Transportation set up an online document which highlighted the claims made by both sides, and provided an open forum to encourage feedback from stakeholders before any decisions were made.

The ongoing debate has caused a great amount of controversy, and here at Routesonline we have been keeping tabs on the evolving story. To refresh your memory relating to the facts and opinions surrounding the debate, we have compiled our analysis and news stories following the dispute below:


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