Emirates warns of a 'sledgehammer' response to US airlines' subsidy allegations

Published May 6th, 2015 - 05:02 GMT

Emirates is pressing ahead with its network expansion in the US regardless of a heated subsidy row with three US airlines, said Shaikh Ahmed bin Saeed Al Maktoum, President of the Dubai Civil Aviation Authority, Chairman of Emirates airline and Chief Executive of the Emirates Group.

Shaikh Ahmed said under the open skies agreement, airlines from both sides have the right to fly wherever and whenever they want. “We are just doing that and expanding our routes and the subsidy row has not in any way affected our plans,” Shaikh Ahmed said at a media roundtable at Arabian Travel Market 2015.

The three largest US airlines — American, United and Delta — have been formally calling on US officials to reconsider the country’s open skies policy with the UAE, claiming Emirates receives $40 billion in “unfair” subsidies. Emirates, which now flies direct to nine US cities and connects passengers to 60 onwards destinations, has not been facing any hurdles for its route expansion in the US, Shaikh Ahmed said. On the other hand, several American cities have asked Emirates to launch routes connecting them with its ever-expanding hub in Dubai. He, however, declined to name the potential destinations, citing competitive reasons and confidentiality agreements. But he said Emirates is looking to accommodate the requests “in a very short period of time”.

Emirates recently announced plans to begin daily flights to Orlando, the airline’s 10th passenger destination in the United States, following the addition of Boston and Chicago last year. More than 250 members of Congress signed a letter urging the US departments of state and transportation to seek consultations with Qatar and the UAE over the allegations.

Shaikh Ahmed declined to provide a timeline as to when Emirates would respond to the subsidy allegations. He said the airline should  be given adequate time to respond to the allegations made.

“We have all the data to prove we are right and there are no subsidies, but putting it all together takes time. They have been working on this for a couple of years. We should be also be given sufficient time to answer these allegations,” Shaikh Ahmed said.

Emirates president Tim Clark said on Tuesday that the argument of stealing market share was weak as many of the destinations in the Middle East, Africa and Asia were minimally served by US carriers.

“We have never been subsidised. We have never received from the government of Dubai any kind of... special treatment,” Clark said, adding that the airline’s growth had been achieved without state intervention or state funding but instead came from its own cash flow, debt issuance and earnings.

“If the US government is as serious about examining the allegations as it says it is — and given that the airlines claim to have taken two years to compile their report — then I need more time to put together a robust response,” Clark said at a seminar at the ATM.

“They have given us 60 days, but the Open Skies agreements do not set a timeframe. We will do it in our own time and we will deal a sledgehammer to their report.”

By Isaac John

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