Austria rejects Emirates’ bid for Vienna landing rights

Austrian Airlines boss says carrier would need 'child labour' to compete with state-backed Emirates
Emirates Airlines chief executive officer Sheikh Ahmed bin Saeed Al Maktoum
By Joanne Bladd
Wed 23 Mar 2011 11:00 AM

Austria’s air traffic control centre has rejected Emirates Airline’s bid to almost double its daily flights to Vienna under its planned summer flight schedule, amid a wider row between Austrian Airlines and the Dubai carrier over access to the European market.

Emirates, the Arab world’s largest airline, had planned to increase flights on the route to 13 a week from March 27 in response to high customer demand, but the request was denied by Austrian authorities over what Emirates has called a “technical disagreement.”

The state-backed carrier told Arabian Business it is still in talks with Austrian authorities to secure the landing slots and is optimistic of the outcome.

“Emirates is confident that from 27th March 2011, a total of 13 flights per week will be operated from Vienna to Dubai in response to a high demand for our services,” a spokesperson said.

“Talks continue with the Austrian authorities to resolve a technical disagreement concerning the air services agreement between the UAE and Austria and our additional flights, which passengers have booked on, Emirates has invested in promoting and hired new staff for.”

The refusal follows explosive comments from the co-chairman of Austrian Airlines (AUA) who this week accused Emirates of leveraging its state links to undercut its European rival.

“It’s not a match of airline against airline – it’s a game between a state and AUA,” Peter Malanik told Austria’s Kurier newspaper Tuesday.

“The hub Dubai is being expanded regardless of the project’s profitability. It’s just about the location. The owner is also the lawmaker, the regulator, it owns the airline and the airport and is in charge of air traffic monitoring. It also provides the kerosene. Money doesn’t matter.”

Malanik said labour rights rules and consumer protection regulations in Europe prevented the region’s airlines from being able to compete fairly with Gulf carriers.

“The situation is similar to the production of T-shirts using child labour. AUA would need to hire 1,000 staff from Bangladesh immediately to be able to compete. Do we want that? Certainly not,” he said.

Austrian Airlines is one of a number of European carriers, including Air France KLM, British Airways and its parent company, Lufthansa – which earlier this year was accused of lobbying its government to stop Emirates securing new landing slots - to call for curbs on the expansion of Gulf carriers on long-haul routes.

The carriers claim Gulf airline use unfair subsidies to finance aircraft deals and to take market share from existing airlines.

A number of US and European airlines are impacted by a so-called 'home market rule,' which states that countries where Boeing and Airbus build aircraft cannot use export credit agencies to help their carriers buy passenger airliners.

The rule, which impacts carriers in the US, UK and France, among others, is seen as offering an unfair advantage to Gulf carriers unaffected by the law.

Malanik said AUA had scrapped flight routes to Mauritius and Australia due to competition from Emirates.

“[The airline’s] next target is to kill our link to Bangkok," he added.

Emirates Airline’s president Tim Clark said in February that European carriers must address their own failing business strategies rather than attacking the growth of Gulf airlines.

“It has taken European carriers donkeys’ years to adapt their business models to the changing dynamics of global civil aviation,” he said. “They haven’t been able to align their traffic flows to what is going on, whereas we have.”

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