March 6, 2015
President of Emirates and US to discuss Arab airlines’ supposed US$40bn subsidy
It has been announced that talks will take place between Tim Clark, President of the Emirates airline, and US officials, in Washington in two weeks’ time. The meeting comes as a result of continued claims by such US airlines as Delta, United and American, who just a few days ago had asked the White House to investigate matters further. These three airlines claim that certain Gulf airlines, including Emirates, Qatar Airways and Etihad, had managed to gain an unfair foothold in the air travel market between the two regions and further afield, through the aid of substantial state subsidies which are believed to have been in the region of US$40bn. More recently the three US airlines have become sufficiently vociferous to call for an end to the ‘Open Skies’ agreement.
This is rapidly becoming a political hot potato as Delta, United and American feel that the livelihoods of airline workers are under threat and they are struggling to remain profitable under such severe competition. However companies like Boeing see the ‘Open Skies’ agreement as beneficial as it is both creating and securing many jobs in the aviation industry. Boeing’s order book is bulging at the seams through the demand for new planes from the Gulf carriers. With an election on the horizon, many votes could be won or lost during any decision-making process.
In a form of retaliation, the Chief Executive of Qatar Airways, Akbar Al Baker, stated that the US airlines were the ones who had received backdoor subsidies through Chapter 11 bankruptcy protection. Part of the Gulf airlines’ fury comes from allegations being openly made, but no access being granted to them to see the actual report on which the claims are based. “I think we need to get a measure of the threat. I’ll talk to some of the players in the government there, I’ll establish how this is being dealt with. After that, we’ll formalise our response,” Tim Clarke said on Thursday when in Berlin. He indicated he hoped that by the time of the meeting in two weeks’ time he will have had time to read the report and formulate a reply, stating that the current situation was “grossly unfair.”
Clarke ended by saying “I’ve been there since the beginning, we were given a clean sheet of paper and a US$10m cheque. We built this through blood, sweat and tears.”