By Ed Attwood
Governments should not be used as referees in rows over the growth of Gulf airlines, says CEO
Airlines must not rope in national governments to try and resolve tensions over the rapid growth of Gulf carriers, the head of the International Air Transport Association (IATA) warned.
“The solution to call in governments as advocates or referees has not worked,” said IATA director general and CEO Giovanni Bisignani during an industry address in Singapore.
“And it will not work. As leaders of a global industry, we must find a fair and reasonable way forward ourselves.”
Gulf carriers have clashed with European and US carriers over their ambitious route expansions and their access to financing from export credit agencies to fund their rapidly-growing fleets.
Rival international operators claim airlines such as Etihad, Emirates and Qatar Airways use unfair subsidies to finance aircraft deals and to take market share from existing airlines.
Some US and European airlines are also 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.
Emirates Airline, the world’s No. 1 airline on international routes, has more than 190 aircraft on order from Boeing and Airbus worth some $66bn.
In recent years, European and North American airlines have increasingly lobbied their governments to curb the number of landing slots granted to Gulf carriers.
A disagreement with Canadian authorities over increased landing rights and destinations for Emirates and Etihad escalated into a political spat last year.
The UAE closed down Camp Mirage, a military base used by Canada to supply its operations in Afghanistan, and also banned free visas for Canadian nationals entering the country.
Earlier this week, Etihad CEO James Hogan said that the airline was willing to “work with local carriers to grow the market” in Canada.
Neighbouring Qatar Airways said in May it will press for daily flights to four cities in Canada in a bid to muscle in on national carrier Air Canada’s long-haul market.
Germany’s Lufthansa has lobbied its national government to block Emirates from gaining further landing slots in the country. The Dubai airline is seeking to add services to Berlin and Stuttgart, on top of links to Frankfurt, Munich, Dusseldorf and Hamburg.
In March, Austria’s air traffic control centre rejected Emirates’ bid to almost double its daily flights to Vienna under its planned summer flight schedule, amid a wider row between Austrian Airlines (AUA) and the Dubai carrier over access to the European market.
Peter Malanik, co-chairman of AUA, accused Emirates of leveraging its stake links to squeeze out European airlines. “It’s not a match of airline against airline – it’s a game between a state and AUA,” he said. “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.”
Emirates has blamed the failing business models of legacy carriers for their inability to compete.
His comments were echoed by Emirates Airline’s president Tim Clark in February, when he said European carriers should 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,” President Tim Clark said in January. “They haven’t been able to align their traffic flows to what is going on, whereas we have.”
Last week, a report co-commissioned by Emirates claimed that the Dubai-based carrier’s international operations were boosting some national economies by as much as one percent of GDP.For all the latest transport news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Why do these EU, US, UK and Canadian Airlines fear GCC carriers? The public will decide which carrier they prefer flying to their destinations and if they get better customer service, comfort and affordability flying with GCC carriers then they will choose those carriers. Maybe these carriers should learn from GCC carriers and incorporate some of customer service advantages they provide their customers which surpasses any EU, US, UK and Canadian carrier. I prefer to fly GCC carriers over any airline in the world and will do so to all my destinations primarily based on the customer service they provide me as a passenger.
Most countries frown on dumping. This is the main accusation here, if it is real I can not tell, but certainly operating conditions are different enough to at least fuel the suspicions.
Airline industry is quite messed up, US carriers have been flying in and out of chapter 11 for maybe 20 years, and EU based companies face also serious questioning about state support.
In terms of labour laws situation could not be more different, and sorry but I need to answer your customer service claims. You get absolutely no compensation for flights delayed, overbooked, or rescheduled in the GCC; this is certainly not the case in the EU, not sure about the US today.
That is for me way more important than having a small screen showing a picture I am not interested in. You may think different.
its all about compitetion, nothing wrong with it. Competition by any means, but everyone knows this region in GCC is doin well, everyone wants to come here and do business! Many years ago only EU and US or such countries did things and no one complained, but now GCC region is! Nothing wrong with it.
@S.Saud, please read my post. You can not compare the service levels from a EU carrier with the ones offered by GCC carriers. There can be no "competition" when players are on very different regulatory frameworks.
Then not everybody wants to come here, in case you did nto realize the disputes are not about passengers terminating their trip in the GCC but they are about transit passengers (US&EU to and from Asia mostly)
And yes, there is lot of protectionism involved in the aviation industry.
I look at the issue from another angle. Why the Europeans and Canadians object to allowing the customers to choose? Telcoguy will continue flying Lufthansa, and if he/she is a typical customer, then the Gulf airlines will fold up and go. If he/she is concerned about the rights of the staff of these airline; then does he/she realize that most of the recruitment for the expansion of Emirates come from staff who worked for the other airlines?
If the "western" business leaders believe in free choice and free markets as they so often claim, it is time to put those principles to practice.
could it be that eu us can just do not want arabs in their club !