American Airlines, Delta Air Lines and United Airlines have joined forces in a campaign against their major Gulf rivals, Emirates, Etihad Airways and Qatar, saying they benefit from more than $40 billion in state subsidies that do not comply with Open Skies agreements between the US, the United Arab Emirates and Qatar.
The US carriers held a press conference in DC Wednesday, joined by representatives of major union groups who claim hundreds of US jobs will be lost if the fast growth of the Gulf carriers is not curtailed.
In exclusive interviews with ATW, Qatar Airways Group CEO Akbar Al Baker and Emirates president Tim Clark responded to those allegations and to a report the US carriers commissioned which they say is proof of the subsidies.
The report—which the US carrier CEOs showed to White House and government officials during closed-door meetings earlier this year—was not shown to the Gulf carriers or made public until today.
Speaking to ATW on the sidelines of the ITB tourism fair in Berlin, Al Baker said he would “like the opportunity to read the report and defend ourselves. I’m sure there could be information in there that could be misleading,” he said.
“If we as Gulf carriers are blamed for tough performance and competing with US or European carriers, then that is in the interest of consumers. We are extremely well received at all destinations. If we have so much negative influence, why are we received so well?” Al Baker said.
The Qatar Group CEO added that the US carriers concerned “have all been through Chapter 11 [bankruptcy protection]. If you look at the history of American carriers—before Qatar existed—they were in and out of Chapter 11 many times. We were not competing with them then, so what was the problem? It is because of their inefficiencies and improper management.
“They got all the support they wanted; [Chapter 11] to me is a backdoor, an indirect subsidy.”
Al Baker said that once he sees the US airline-commissioned report, he would “adequately respond to every point they have made. We should have the right to defend ourselves. You can always make a derogatory statement, but we should have the opportunity to respond. We will respond very robustly to all the allegations, false allegations, which the report may contain.”
Emirates’ Tim Clark also pointed out the report was not provided to him. “I understand it took two years [to complete the report]. Who was paying for this? Shareholders?” he told ATW.
“I hope that the organizations reviewing this will take it onboard, but at least give us the chance to respond.”
Clark added that the US report and campaign “strikes me as extraordinary. I've been here since the beginning [of Emirates Airline]; I know we were given a clean sheet of paper and a 10 million dirham ($2.7 million) check [to launch the airline]. We built this through blood, sweat and tears, had enormous difficulties, took big risks … We do not receive subsidies.”
Clark said Emirates financials have been made public since the early 1990s.
“This is grossly unfair. We will formalize our response and I hope we’re given the chance to do that.”
He said that to reverse Open Skies agreements “would be madness; it’s done the US an enormous power of economic good.”
(Kurt Hofmann and Karen Walker - ATWOnline News)
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