Aeromexico cuts jobs as Emirates launches new Mexico City flight

Mexican carrier and the country's pilots union have vowed to take legal action to prevent Emirates' fifth freedom flight to Mexico City through Barcelona
Aeromexico cuts jobs as Emirates launches new Mexico City flight
Aeromexico CEO Andres Conesa Labastida said that airline was disappointed with the Mexican government’s support of the move, which forced it to cancel its Shanghai flight to increase flights to Barcelona to compete with Emirates from March 2020.
By Bernd Debusmann Jr
Tue 06 Aug 2019 01:51 PM

Mexican carrier Aeromexico has been forced to make job cuts and cancel its flights to Shanghai in response to Emirates’ new daily service to Mexico City via Barcelona from December this year, according to media reports.

The fifth freedom flight – which allows an airline to fly between two foreign countries so long as the flight begins and ends in the airline’s home country – is slated to begin on December 9 and will be operated with a Boeing 777-200LR.

In a July 17 call with reporters, Aeromexico CEO Andres Conesa Labastida said that airline was disappointed with the Mexican government’s support of the move, which forced it to cancel its Shanghai flight to increase flights to Barcelona to compete with Emirates from March 2020.

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“We have decided to increase our operations [to Barcelona] to daily flights. Firstly, because we have seen strong demand on the route, but also as a response to the government’s disappointing decision to grant fifth freedom rights to Emirates, despite the state subsidies Emirates receives,” he was quoted as saying by Mexico’s Spanish-language El Universal newspaper.

Conesa added that Aeromexico believes “it’s not fair”.

“We will do anything we can, including taking legal action, so that this does not happen,” he said. “Giving fifth freedom flights on a route that is served by a national carrier has never happened before.”

Accusations that Emirates is backed by large subsidies from the Dubai government have been labeled at the carrier for years and have been stronly denied by its executives.

"Some detractors like to claim that Emirates receives government subsidies and therefore represent unfair competition. But these allegations are patently false, and we have repeatedly debunked these myths over the years. Our audited financial reports for the past 20 years are published on our website for anyone to inspect.

"Emirates has always been run on a commercial basis. In fact our success is driven by the very fact that we must stand on our own feet – which means we must keep winning over customers with the best possible services, while closely watching our costs so that we can return a profit to our shareholder," an Emirates spokesperson said this month in a recent statement.

The subsidies issue is one that has been hotely debated in the United States and which was recently addressed by Sir Tim Clark, President of Emirates Airline in a opinion piece.

"To prevail, they [American Airlines, United Airlines and Delta Air Lines] must show they have suffered commercial harm as a result of the alleged unfair competitive conduct. Having collectively earned more than $40 billion in tax-free profits since starting their campaign in January 2015, it is extremely difficult to do so.

In a separate interview, the director general of the Union Association of Pilot Aviators – known by its Spanish acronym, ASPA – said that the Aeromexico’s cancellation of the Shanghai route had already led to the loss of 40 direct and 140 indirect jobs related to the flight.

ASPA is now seeking talks with the Mexican government, the Secretariat of Communications and Transportation (SCT) and the Directorate General of Civil Aeronautics to express its concerns over the Emirates flight from Barcelona.

“We can protect ourselves legally and we are also analysing different options, including going to international courts," he said.

The Emirates announcement has the backing of Mexican tourism officials, who foresee a significant boost to tourism and investment once the flights begin.

“Mexico supports the launch of the long-awaited flight…which responds to Mexico’s government tourism policy towards opening new markets and strengthening connectivity between the Middle East and Mexico,” Minister of Tourism Miguel Torruco Marqués said in July. “We are eager to receive tourists from this part of the world.”

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