“Europe is at the crossroads of international travel,” says Air France’s chief executive Pierre-Henri Gourgeon, at the start of a long moan about Gulf carriers. Err, Pierre, are you sure? Everywhere is the middle of somewhere, I suppose, but today more and more Europe does not look like the crossroads of international air travel. The Gulf does. In fact, increasingly, European carriers are starting to look like useless old aristocrats, clinging futilely to some notion of divine right to rule the skies, all the while being washed away by the stars of a new meritocracy.
Perhaps the word meritocracy seems a bit strong given that of the Gulf’s famous long haul carriers – Emirates, Etihad, Qatar Airways and Gulf Air – it is only Emirates that turns a profit, but that will change very soon, certainly for Etihad. Besides, as long as Gulf carriers are flying, and cornering the market, which they are unarguably are, then there is little point in rivals bleating about fairness. Business isn’t always fair. Better to adapt to that reality and try to do something about it.
Besides, how many European carriers are in the black today?
In fairness, to him, it sounds as if Monsieur Gourgeon is trying to do something about it, urging America and European countries to “defend” Europe’s cossroads status by changing laws which seem to actually make it harder for domestic airlines to access credit facilities to buy new planes than foreign ones.
Fair enough – and sensible, no doubt, – but then he went and made a nonsense of what he was saying by wittering about the preferential treatment Emirates receives at Dubai airport – saying that the airline was exempt from airline charges. “They don’t pay tax – they don’t even have a word for it,” he added.
But Emirates does pay the same airline charges at Dubai airport as every other airline that uses it. It doesn’t pay corporate or income tax, but then no one in the Gulf does, and this is a state of affairs that is unlikely to change for the sake of European airlines.
“Emirates is run as a fully commercial business, unlike many European carriers,” was Emirate’s immediate response to M. Gourgeon’s comments. And more recently, Dubai Airports CEO Paul Griffiths has added that “the only thing Dubai is guilty of is providing an environment that actually supports aviation.”
He said: “Most governments around the world treat aviation as a pariah, choking its growth with costly, misdirected regulation, instead of adopting policies that recognise its considerable socio-economic benefits and support its sustainable growth. They then compound the problem with parasitic forms of taxation that usually flow straight out of the sector.”
The moaning European airlines do about Gulf airlines is becoming dull. They complain, sometimes off the record, that Gulf airlines get either free or subsidised fuel (Etihad CEO James Hogan has denied this categorically to me, and Emirates President Tim Clark has said he will resign immediately if anyone can prove it is happening). They say the airlines are heavily subsidised (as are most European carriers, let him without sin etc.), they say the Gulf airlines don’t have to pay their staff as well as they would were they in Europe (err, Gulf airlines are not in Europe), and they say the airlines don’t pay tax (see above). And then, when that fails, they make sniffy noises about Gulf carriers being arriviste, nouveaux riche (well, better nouveau than no riche at all, eh?).
European airlines are very expensive and always on strike these days. If you are lucky enough to fly on a day when a European carrier is not on strike, then the baggage handlers will be, or air traffic control. The worst that will happen when flying with a Gulf carrier – if it is Gulf Air it is virtually a certainty – is that you might be delayed. But at least you will get there.
European carriers need to start looking at themselves for answers to the question of why they are being beaten. The market may be skewed, but it still doesn’t lie.
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