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Tue 17 Mar 2015 10:30 PM

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Clark: I want apology from US carriers over subsidy claims

Emirates president says airline will prove that it has not benefited from subsidies given by Dubai gov't

Clark: I want apology from US carriers over subsidy claims

Sir Tim Clark, president of Emirates Airline, said on Tuesday that he expects an apology from US carriers after he proves his airline has received no subsidies from the Dubai government.

Clark was one of a number of top aviation executives from the Gulf and the US who clashed in Washington over whether "open skies" deals are fair.

US carriers claim the Gulf airlines are benefiting unfairly from government subsidies. A coalition of Delta Air Lines Inc, United Continental Holdings Inc, American Airlines Group Inc and their labour unions accused Gulf rivals of receiving more than $40 billion in government subsidies.

But in a robust defence, Clark said: "There is a lot of low hanging fruit in the report which we will find it extremely easy to respond to."

He described an allegation in the report that the carrier was bailed out of $4 billion of fuel hedge losses as "tosh".

"Let me tell you that some of the figures in there were factually incorrect - the conclusions that were drawn were incorrect and we will put the record straight with regard to the fuel hedge," he said.

"We will rebut all the things that are said about us. Once we have done that, I expect to be given the benefit of an apology from people who have actually made these allegations," he said.

"We do not receive subsidies in any shape or form," he added.

Asked what he thought was driving the opposition from US carriers, he said he didn't know.

"The US carriers should be working with us, not against us," he said, pointing out that Emirates brings 2.4 million tourists to the US each year.

He added that he hoped the dispute would not affect the Dubai-based airline's expansion plans in the United States.

"It is a key part of our expansion strategy and we're looking to fly to 20 cities. We see no reason why there should be any retardation in what we are planning to do," Clark told reporters.

Emirates now flies 84 flights per week on a "non-subsidised basis", Clark said.

He also dismissed the possibility that he might have to resign should any of the allegations made by the US airlines be proven.

"I won't have to resign because the allegations are incorrect so let's park that. I stand by everything I have said."

Clark didn't rule out the possibility of settling the dispute with legal action but added that he hoped "good sense" would prevail.

Emirates Airline, Qatar Airways and Etihad Airways have denied receiving improper subsidies, saying US airlines have lost market share in part because of inferior service.

Delta, United, and American have called on the Obama administration to address whether to renegotiate open skies agreements with Qatar and the United Arab Emirates.

The Obama administration has said it takes competition concerns of the US airlines seriously, but remains "committed to the open skies policy" which it says has helped travelers, the US aviation industry and the US economy.

On Tuesday, US House Committee on Transportation and Infrastructure chairman Bill Shuster told reporters the panel has asked the administration to look into the subsidy allegations, which he said appear valid.

"They're state-owned companies, and they're getting what we believe are infusions of cash, which is not fair," Shuster said.

According to prepared remarks reviewed by reporters, American Airlines Chief Executive Doug Parker plans to tell the conference that subsidies for the Gulf airlines "distort the competitive marketplace," and unless something is done, US airlines, the US economy, and US jobs will pay a very expensive price."

Earlier, Etihad CEO James Hogan delivered a spirited defense of his company, saying the government of Abu Dhabi did provide startup capital and loans, but did so as a rational shareholder, and is expecting and getting returns on its investments.

"I don't apologise for anything," Hogan told attendees at a conference sponsored by the US Chamber of Commerce. "Shareholder loans and equity? That's business."

US airlines complain that the Gulf airlines are taking away passengers and putting US jobs at risk. Hogan said his airline has helped the United States by buying 787 Dreamliners from Chicago-based Boeing Co, delivering 180,000 passengers a year to the three US airlines that have lodged complaints with the US government and supporting travel to six US cities.

Captain Rick Dominguez of the Air Line Pilots Association, which backs the US carriers' complaint, disputed Hogan's contention that government aid to his company was a loan rather than a subsidy.

"When you have a loan that has no repayment schedule, and later years is actually forgiven, was it ever a loan?" Dominguez asked.

Last week, the European Commission said it will address French and German complaints about alleged subsidies later this year when it proposes a commercial aviation agreement with the Gulf region.

Lufthansa Group chief executive officer Carsten Spohr said at the Chamber event that bilateral agreements with Qatar and the United Arab Emirates "must be reviewed and must be renegotiated."

* With Reuters

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ASIF AHMED 4 years ago

Liberalization is the key to success. things should move forward rather than rolling back. Protective policy is not the solution to curb competition. The USA & EUROPEAN CARRIERS have dominated the aviation industry market till the 80's around the globe.....The economic cost is same for all airlines operating around the world...The alleged complain of the western carriers against the Gulf carriers is not a valid reason to crib.Survival to the fittest & competition is the name of the game.... Re negotiation of bilateral agreement and policy is not wise, rather detrimental to the growth of the aviation industry.....

Nezaud 4 years ago

By now, every one knows the USA is an expert in manufacturing evidence to unjust claims. Look at the evidence they manufactured to invade Iraq.