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Sun 8 Mar 2015 12:32 PM

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UAE-US Business Council says airlines’ dispute puts $19bn trade surplus at risk

Gulf airlines will assess the report before commenting

UAE-US Business Council says airlines’ dispute puts $19bn trade surplus at risk
Danny Sebright, president of the Washington DC-based UAE-US Business Council.

The US-UAE Business Council has said any limitation placed on the free trade, or restrictions on the open skies agreement between the two countries, would affect the $19 billion trade surplus.

Three US carriers, under the banner of ‘Partnership for Open & Fair Skies’, released a document outlining how Emirates, Etihad Airways, and Qatar Airways have “received $42 billion in quantifiable subsidies and other unfair benefits from their respective governments in the last decade”.

The 55-page white paper, released by American Airlines, Delta Air Lines and United Airlines, claims the alleged subsidies received by Gulf airlines are “in violation of Open Skies policy and put thousands of US airline jobs at risk”.

In response, both Etihad Airways and Emirates have said they will consider the contents of the report before responding.

“We will provide a comment after we have had time to properly review and respond to the claims made within the report," an Etihad spokesperson said.

Sir Tim Clark, president of Emirates, said he was confident that the allegations against the Dubai-based carrier would be proven to the unfounded.

“We have only just got a copy of the white paper prepared by Delta, United, and American – which to date has been presented only to select officials and journalists. We will provide a response when we’ve had the opportunity to fully review the allegations. We are confident that any allegation that Emirates has been subsidised is totally without grounds,” he said.

US-UAE Business Council President Danny Sebright said the US airlines should “stop complaining and start competing”.

“With a $19 billion trade surplus at stake, US officials should stand with virtually every single stakeholder in US commercial aviation, such as US airports, travel and hospitality companies, business travellers and cargo airlines, and resist any efforts to limit free trade or restrict Open Skies agreements with the UAE,” he said.

A 2013 Business Council report on the US-UAE commercial aviation relationship identified more than $16 billion in annual benefits to the US, which supported more than 100,000 jobs and generated over $1.6 billion in tax revenue, while a 2014 report details that over $130 billion in sales of Boeing aircraft to UAE carriers.

“UAE airlines are the biggest international buyers of US-manufactured commercial aircrafts and engines, with over 400 airplane deliveries and orders in the last 15 years,” said Sebright.  “And with 252 non-stop flights a week to the US, UAE airlines are bringing millions of visitors a year to cities across America, filling local airports, hotels, attractions, and restaurants. Emirates and Etihad also feed hundreds of thousands of connecting passengers a year to US airlines.”

He said American Airlines, Delta Air Lines and United Airlines should check their own balance sheets before criticising any government support for international competitors.

“Since 2006, the Big 3 transferred billions of dollars of pension liabilities directly to Uncle Sam while leaving creditors holding the bag for billions more through multiple bankruptcies,” said Sebright.

“They received billions in cash payments and guaranteed loans in a direct government bailout while enjoying the advantages of antitrust immunity to fix transatlantic fares with their European partners. If that weren’t enough, as a result of Fly America, the Big 3 also benefit from the exclusion of any international competition in the US government market - the world’s largest,” he added.

Sebright said the US carriers missed out on the shift in global travel trends, with the rapid growth of travel between emerging markets in Asia, Africa, and the Middle East are now looking to blame Gulf airlines.

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Mick 5 years ago

Just like the Canada hullabaloo, the UAE cannot seem to compartmentalise or demarcate their airline arguments and leave disputes outside of government relationships. It's sad.

Rich 5 years ago

At the end, Emirates, Etihad, Qatar, all are owned by their governments -not any governments, but the energy wealthy govs.