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Mon 8 Jun 2015 01:51 PM

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US, Gulf, European airlines 'set to clash' at Miami event

Intensifying subsidies row between carriers is expected to cause tension at an aviation conference in Florida

US, Gulf, European airlines 'set to clash' at Miami event

Gulf airline executives are expected to clash with their US and European counterparts at a conference in Miami this week.

Representatives from around 150 carriers are gathering in Florida on Monday and Tuesday for the annual meeting of trade body the International Air Transport Association.

But this year’s convention comes amid growing conflict between rival airlines over market access and allegations of receipt of government subsidies by Gulf airlines.

The three biggest US carriers – American, United and Delta Air Lines – as well as Europe’s Air France-KLM and Lufthansa, have urged their governments to block further market access to Emirates, Etihad and Qatar Airways.

They claim the Gulf airlines have received $42 billion in government backing that has unfairly spurred their growth, and want the Obama administration to revise existing air traffic agreements between the US and Middle East.

All three Gulf carriers deny the claims.

According to the Wall Street Journal, Lufthansa chief executive Carsten Spohr – who has long called for restrictions on Gulf rivals’ growth – told reporters the night before the conference that the US carriers’ campaign “makes our discussion more credible”.

“This has now become a global debate,” he said, adding that airlines should look to World Trade Organization dispute resolution models as a way of rebalancing the market.

But Eithad Airways chief executive James Hogan reportedly countered: “It is two airlines in Europe and it is three airlines in the US. Does that represent the world of aviation?”

Hogan has in recent weeks described the US campaign as a “narrow attack” and denied that Etihad’s growth has damaged the US carriers. Rather, he said, operating new US routes has created, not destroyed, US jobs.

His view is shared by Emirates Airline president Tim Clark who told Chicago Mayor Rahm Emanuel in a strongly worded letter last month that Emirates’ recent order of new Boeing 777X aircraft made by Chicago-headquartered Boeing would support over 400,000 US jobs – of which 50 will be in Chicago.

The WSJ quoted John Strickland, director of aviation advisory JLS Consulting, as saying it is “hard to predict the outcome” of the dispute. “There are so many potential ramifications.”

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