Etihad CEO speaks out on US airline campaign against Gulf carriers

Etihad Airways president and CEO James Hogan has made his first public comments on the growing campaign by the three largest US carriers against the three Gulf airlines they say operate on the basis of unfair government subsidies.

In a strong keynote address at the US Chamber of Commerce Foundation 14^th Annual Aviation Summit in Washington DC, said this was the right time and the right forum “to clear the air.”

American Airlines, Delta Air Lines and United Airlines have joined forces in a campaign, supported by several US union groups, to have Open Skies agreements with the United Arab Emirates and Qatar reviewed.

They say that Etihad, Emirates Airline and Qatar Airways breach Open Skies rules because they are heavily subsidized and distort the competitive marketplace. In a white paper, the US carriers accuse Etihad alone of benefiting from $6.3 billion in state equity infusions and $4.6 billion in government interest-free loans.

Today, Hogan countered those accusations, saying Open Skies has been “a model of success, generating enormous benefits for travelers and for airlines in the US, the UAE and around the world.”

“As one of the newest national airlines anywhere in the world, we’ve had to create everything from scratch: every bit of product, every bit of our operations, every bit of our infrastructure,” he said.

“Etihad is a David, a David who’s been facing Goliaths since 2003, when we started.  In virtually every market we’ve entered, we’ve had to face existing competitors, with established businesses, established infrastructure, established sales and marketing, established brands, and established customer bases.

“To take them on, we’ve had to work harder and we’ve had to work smarter.  That’s called competition.

Hogan said Etihad had been helped by its geographic position, at the crossroads of today’s trade and travel routes. 

“We’ve been helped by our blank sheet of paper—no legacy systems, no legacy aircraft, no legacy mindsets,” he added. 

As a national airline owned by its government, Hogan said, Etihad was no different from scores of airlines around the world.  The airline has always made clear it has received equity investment and shareholder loans, which have been supplemented by $10.5 billion in loans from international financial institutions.

“Our shareholder believes in our business plan.  They have increased their commitment as we have developed—they have invested in our success.”

Hogan did not directly address the $10.9 billion in subsidies that the US white paper alleges.

But he said Open Skies was about customer choice.

“Customers choose to fly Etihad Airways because we offer a great product, with outstanding service, on the routes they want to fly, at prices that are competitive within those markets.

“They choose us against many different competitors, depending upon which market we are in. But quite honestly, it is very rare that US carriers offer those alternatives. No US carrier flies into Abu Dhabi. There are very few US carriers operating to where we do in the Indian sub-continent, in Southeast Asia, or in the wider Middle East.

He ended by saying, “We make no apologies for offering new competitive choice for air travelers. We hope to continue to do so around the world.”

(Karen Walker - ATWOnline News)