World Economic Forum, MENA, Special Report 2015

Open Skies 'exists for a reason', says GE boss

Firm's head of international ops says rationale for liberalised aviation policy 'has not changed' amid ongoing dispute

The vice chairman of General Electric (GE), one of America’s largest corporates, has expressed support for the ‘Open Skies’ policy at the centre of a row between Gulf airlines and their US counterparts.  

“We are, at our heart, kind of free traders, and we believe that Open Skies exists for a reason, and we don’t think that reason has changed,” John Rice told Arabian Business in an interview on the sidelines of the World Economic Forum summit in Jordan.

Delta and two other major US airlines have charged three fast-growing Gulf carriers - Dubai's Emirates, Abu Dhabi's Etihad Airways and Qatar Airways - of receiving more than $40 billion in unfair subsidies, and the US airlines' unions have urged their government to halt the Open Skies agreement.

The Gulf carriers have dismissed the charges as false. Research commissioned by Etihad Airways, which was released last weekend, sought to disprove claims that Gulf carriers have put “excessive capacity” into the market, finding that the markets in which the Abu Dhabi airline operates have much higher average rates of economic growth than the global average, which in turn drove a higher demand for air services.

“We want to support airlines in the Gulf region, we want to support airlines in the United States. We tend to not want to be front and centre in terms of the politics of one side versus the other,” Rice added.

“We like to see free flow of trade, people, air travel, if you will, and that’s what we advocate.”

GE provides engines for most of the Gulf’s airlines, including Emirates, Etihad, Qatar Airways, Saudi Arabian Airlines and Air Arabia. Last year, the company said it had a 68 percent share of the aviation engine market in the region.

Last month, Emirates announced that it had signed a $9.2 billion contract with the UK’s Rolls-Royce, a deal that will see the latter supply engines for 50 A380 aircraft in the Dubai airline’s fleet.

It was the first time Emirates has ordered A380 engines from anyone other than the Engine Alliance, a joint venture between GE and Pratt & Whitney. Some analysts have argued that the move was as a result of the US airlines’ campaigns against their rivals in the Gulf, a point denied by Emirates president Sir Tim Clark.

When questioned on the deal, Rice simply said: “You can’t win them all”.

Regionally, GE has partnership deals with the UAE’s Mubadala and Saudi Arabia’s Ministry of Commerce & Industry, among others. The company has also tied up with Emirates to run a test engine facility in Dubai, while the company’s Advanced Technology & Research Centre in Qatar Science & Technology Park contains one of GE Aviation’s five global training facilities.

Connecticut-based GE was ranked as the ninth biggest public company in the world, and the third largest in America, in the recent Forbes Global 2000 list for 2015.

Click here for all the stories from our coverage of the World Economic Forum, MENA, in Jordan

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