Emirates rebuts subsidy claims, says US airlines have ‘unclean hands’

Emirates Airline has issued a 192-page report rebutting subsidy allegations lodged against it by American Airlines, Delta Air Lines and United Airlines, calling the US carriers’ argument “a mess of legal distortions and factual errors.”

Emirates president Tim Clark spent more than 90 minutes briefing reporters and fielding media questions Tuesday morning in Washington DC, pushing back strongly against American, Delta and United. “We will not be subjected to bullyboy tactics and browbeating,” he said. “We have to stand our ground on this … There must be a line drawn in the sand … In the end, enough is enough.”

Clark said he met Monday with representatives of the US Departments of State, Commerce and Transportation and presented them with Emirates’ rebuttal report. “They assured us they would evaluate this case on the facts,” he said. “They won’t be influenced by theatrics … They’ve been receptive, they’ve been listening.”

In the report, Dubai-based Emirates categorically states that it is not subsidized and charges that the “Big Three” US airlines “come to this debate with unclean hands. They have received billions of dollars in government support, including US government assumption of airline pension obligations, airline stabilization grants, loan guarantees, grandfathering of airport slots, bankruptcy relief from debt and other obligations, direct grants and tax exemptions to support airport development, grants of antitrust immunity to form market-dominant alliances, protection of the US market from foreign competition, and the prohibition against majority foreign ownership.”

Clark said the three US airlines “have received more than $100 billion in government support since 2002.” In the report, Emirates charges that the US airlines “are asking the United States to undertake a massive departure from Open Skies policy.”

Clark asserted that “there is no facility within the [US-United Arab Emirates Open Skies] document” to reopen the agreement over the subsidy dispute between the US airlines and Emirates. (The US carriers also allege Etihad Airways and Qatar Airways have benefited from subsidies that violate Open Skies accords.)

While Emirates is owned by the Dubai government, “Emirates has earned a profit for 27 straight years” and “is a financially transparent business with nothing to hide,” Clark said. He acknowledged that Emirates has benefited from the Dubai government’s “visionary policies in aviation” that are “envied by the European Union and the US,” adding, “Of course the state, as it does in the United States, provides aviation infrastructure.”

But he said such government backing is in no way a justification for disrupting Open Skies agreements, noting that many airlines around the world are owned or partly owned by governments.
 
“Where does it end?” Clark asked. “Where do the [US] legacy carriers cherry pick? There are many, many state carriers now flying to the US … You start on this path of interdicting Open Skies, it will never end … Once it starts with us, what are you going to do with the Chinese carriers?”

Jill Zuckman, a spokesperson for the Partnership for Open & Fair Skies coalition backing the US airlines’ campaign against the Gulf carriers, said, “Emirates can submit as many pages as it wants, but it still won’t paper over what has been well-documented: Emirates has received billions in subsidies and unfair benefits from the treasury of the UAE … We respectfully ask that the US government request consultations with Qatar and the UAE, and stand up against these unfair government subsidies that violate our Open Skies agreement.”

(Aaron Karp - ATWOnline News)