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Mon 28 Mar 2011 10:30 AM

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Emirates Vienna expansion is bad for business, says Austrian Airlines

Flag carrier asks for government compensation after Emirates is given new landing rights

Emirates Vienna expansion is bad for business, says Austrian Airlines
Emirates says the small engine fire was quickly extinguished. (Photo for illustrative purposes only)
Emirates Vienna expansion is bad for business, says Austrian Airlines
Austrian Airlines

Austrian Airlines has asked for government compensation to
allow it to compete with Emirates Airlines, after the Gulf carrier won
permission to almost double its flights to Vienna.

Emirates has agreed a deal with Austria’s transport agency
to increase its flight schedule to 13 a week from March 27, in response to high
customer demand; a move which Austrian Airlines said would impact heavily on
its business.

“This is not a good decision, either for the Vienna hub or
for the city as a business location,” an AUA spokesperson said in an emailed
statement.

The airline said that fees such as domestic flight ticket
taxes and costs related to carbon dioxide emissions – which don’t affect
Emirates as a non-European airline – mean it is unable to compete on an equal
footing with its state-backed rival.

“It is becoming increasingly difficult to offer non-stop
long-haul flights from Vienna, as carriers in the Gulf operate subject to
completely different preconditions than European airlines due to the
intertwining of state, owners, airport and airline in the region. Quite simply,
competition is not taking place on a level playing field,” the spokesperson
said.

Austrian Airlines would need to be “rapidly compensated in
turn through the suspension of another measure which places an unnecessary
strain on the location: the flight ticket tax.”

The agreement to increase Emirates’ summer landing slots is
understood to be a temporary, with a fresh round of discussions planned in six
months.

The dispute is the latest war of words between Emirates Airline
and its European rivals. France’s KLM, British Airways and Germany’s Lufthansa
– which earlier this year was accused of lobbying its government to stop
Emirates securing new landing slots – have all called 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.

Co-chairman of AUA Peter Malanik last week said state cash
means Emirates is becoming an unchallenged force.

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

The airline said it has scrapped direct flights from Vienna
to Australia and Mauritius as a result of unfair competition from Gulf
carriers.  

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Nick 9 years ago

European carriers are acting like sore losers by crying foul over fair competition and by demanding government protection from foreign carriers.

This is a high time they should learn from their mistakes, reduce costs and provide quality service at reasonable price.

If they still cannot take the heat, then they should leave the Aviation business and let the pros take over.

Vincent 9 years ago

There is no smoke without fire! There has got to be some truth in the allegations raised by Eropean Airlines. it should take extreme stubborn attitudes within the European Airlines to not try to compete if indeed reducing costs was a possibility. How about that?

Telcoguy 9 years ago

alternatively Emirates could be subject to the same level of regulation than they are and then we would be able to compare how the pros perform.

John 9 years ago

If this was fair competition I would agree with you...

Salman 9 years ago

While I dont think the Gulf Carriers are the pros, The EU Carriers also should be careful in their approach. They have enjoyed unfair advantage since aviation began and now when they are on the losing side they are crying foul? Yes Gulf Carriers are state backed and have the cash but I'm 100% sure the EU carriers have had help in the past from their own governments even if it is just in the form of influence.
They just dont like it that they are losing out on their home turf. The Gulf Carriers do have advantages but they are only a problem for the EU now that they are losing? I mean come on now....times have changed....

Salim Shaikh 9 years ago

AUA should start paying their staff Bangladesh wages based on the Austria's transport Agency's decision. That way they would have at least matched ATA's jurisprudence, and at the same time reaffirmed their survival statement with what's in their hand, if not the actual hiring of Bangladeshi staff.

Louie Tedesco 9 years ago

Perhaps Nick would like to work on the airport tarmac in 50-degree heat for 1000 dirhams salary (140 GBP)?

Or would you prefer a comfy aircon office handling passenger complaints or lost baggage for 1500 dirhams (250 GBP)?

If salaries were equal, competition would be equal.

Stop bashing european airlines who offer their staff a living wage, labour representation and who honour contractual commitments.

Nick 9 years ago

Louie, you are talking about labour laws which is a completely different topic and argument in general. If AUA has a problem with labour laws and other regulations, then they should take it up with their govt. instead of crying foul.

If people are willing to work for lesser pay, then it is a competitive advantage for corporations in the Gulf countries where labour laws are different from their European counterparts. The counter argument is that these people are not slaves and they have come over here to earn their livelihood because of lesser opportunities back at home. Large corporations are known to exploit labour by setting up factories in developing countries and paying lesser wages thus bypassing labour laws in their country of origin.

By the way, temperatures in UAE are not always 50 degrees celsius.