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Fri 23 Oct 2015 01:19 AM

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Will the airline subsidies debate ever end?

Emirates Group has paid $4bn worth of dividends to the Dubai government in the past 30 years, so who is helping out who, asks Ed Attwood

Will the airline subsidies debate ever end?

Have you ever heard of a guy called Rob Britton? No? Neither had I until a couple of weeks ago. Rob’s day job is adjunct professor at the McDonagh School of Business at Georgetown University in Washington. But he also moonlights as an opinion writer for a couple of news outlets, including the Huffington Post, a website for which he has written ten comment pieces since April this year. Each of them has been about the subsidies debate currently taking place between the three largest American carriers and their counterparts in the Gulf.

That’s all fair enough. Rob is entitled to his opinion, even if he is a bit obsessive about it. As well as the slew of online articles, every single tweet he has sent since March this year is related to the subsidies discussion.

Why? His author page on the Huffington Post simply states that he “has worked in or near the airline industry since 1984”. Thirty seconds of online digging, however, shows that in 2006 he retired as managing director of brand development and advertising at American Airlines. At the very least, one would hope that Rob might make it easier for his readers to understand why he holds the opinions that he does. But I digress.

In Rob’s most recent piece, entitled ‘Emirates Airline’s One Percenters’, he criticises the carrier’s most recent ad featuring Jennifer Aniston, which riffs on the fact that the airline’s A380s have on-board showers. The author’s main bugbear about the ad is that only a few (2.9 percent, to be exact) passengers actually have access to the showers. Well, Rob, anyone who buys an economy ticket and is expecting to wander on-board and straight into a shower probably needs to have their head examined — it’s hardly a smoking gun.

But then he wanders into more difficult territory.

“Staffing with expendable, low-paid workers is an integral part of the Gulf airlines’ high quality/low cost business model,” says Rob. “Unlike workers in the West, their employees cannot join a trade union or even enjoy basic worker due process. You mess up, you get sent home — and there are literally millions waiting to take your place (this reality allows Emirates and others to cynically crow about the tens of thousands of applications they receive every year).

“And if you need a pay-check so you can send part of it home so your little brother in Manila can pay school tuition, or for mom and dad in Mumbai to buy food and have a mobile phone, you’ll endure whatever is necessary.”

This kind of comment seems to me to spectacularly miss the point. It’s true that there aren’t unions in the Gulf, but potential employees are, or should be, aware of that before they arrive. That is what’s known as choice. And the fact that Emirates — plus Etihad and Qatar Airways, for that matter — is creating jobs that support families living in poorer countries (and richer ones) should really be something to be proud of, not to denigrate.

That’s not to say Emirates is the perfect place to work — I’ve yet to come across a company in which a sizeable proportion of the workforce aren’t griping about something or another — but the fact remains that over the course of the last 30 years, thousands of families have benefitted through their association with the airline. None of this fits Rob’s portrayal of a company that likes to exploit its workers, however.

Let’s face it — there’s never going to be an end to the back and forth between people like Rob and those who disagree with him. The US airlines claim that the Gulf carriers have had $42bn worth of subsidies, while Emirates and company say their counterparts have benefitted to the tune of over $70bn in exactly the same way. This issue will continue to be clouded by emotion and politics, even after the US eventually makes its decision.

For me, one figure really stands out — $4bn. That’s the sum of dividend payments that Emirates and its sister air services company dnata have paid back to the Dubai government to date. That tells me that it’s the airline subsidising the emirate, not the other way around. And for a one-off investment of $10m 30 years ago, $4bn is not exactly a bad return.

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