Emirates chief hints at legal action against US "subsidy" critics

In a hard-hitting interview with global financial news service Reuters, Emirates Airline president, Sir Tim Clark, has called for the right of reply to the 55-page dossier prepared by three American airlines claiming unfair subsidies and presented to the US government.
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In the interview published today Clark urged Washington to block the three carriers’ calls to renegotiate Open Skies agreements and also asked the US to think about the impact on its aerospace industry, which has been boosted in recent years by orders from the Gulf.
The American carriers – Delta, American and United - have called for the renegotiation or suspension of Open Skies liberalization deals with the United Arab Emirates and Qatar.
The carriers claim Gulf states broke the trade deals by pouring $40 billion of alleged subsidies into their carriers, something Gulf nations and airlines have repeatedly denied. In the interview Clark also hinted at possible legal action against the US carriers.
Industry analyst Saj Ahmad backed Clark’s response. “The verbatim coming from US airlines, particularly from the likes of Delta is nothing but sour grapes and stinks to high heaven of desperation,” he said
“The undisputable fact is that passengers choose to want to fly on Arab carriers like Emirates more than they want to fly on US airlines. This is why Emirates has been expanding its footprint in both North America and Latin America. They are providing multi-city connections that incumbent airlines simply do not offer. Exactly how many US airlines have flights to Dubai or Abu Dhabi from gateways like Seattle, Los Angeles or Houston?
“And how is it the fault of Emirates (or others) if US airlines cannot raise their game? Airlines like Emirates, Qatar Airways and Etihad offer one stop connections between pretty much any two global city pairs, but that these airlines also offer immense product quality, value for money and very efficient airport hubs that makes connections easy and seamless.”
Ahmad said the American critics were missing the point about the business models applied by the carriers. The US carriers complained that the three Gulf carriers had switched strategy after the deals were negotiated to become global hubs threatening the rest of the industry, rather than ordinary national carriers.
Clark denied Emirates had changed direction and told Reuters that its growth and strategy were discussed openly during the trade talks that led to the 1999 Open Skies deal.

 

Saj Ahmad said: “Growth at Emirates, Qatar Airways and Etihad is no fluke. They have wisely operated under a raft of open skies agreements, including that of the USA to provide services which US airlines and others have failed to bridge or acknowledge - and so, to then criticise the big Arab Three, is a bit of a misnomer.
“US airlines are living in a deluded time warp. They still think it's the 1970s where regulations exist. Sadly, they need to wake up and smell the coffee. The big Arab carriers are here to stay.
“Instead of whining like EU airlines, US carriers, especially Delta, should hang their heads in shame at their lack of competitiveness and poor cost structures. The fact that they are saying these ill-founded remarks about Arabian airlines only serves to show how naive they are. Emirates publishes its accounts and its crystal clear that they are not subsidised at all. Whatever document that US airlines are peddling on Capitol Hill frankly isn't worth the paper it's written on.”
Emirates has ordered a total of 289 Boeing wide-body jets, including 199 that have yet to be delivered. It is also the largest single customer of European planemaker Airbus
"We have invested heavily in the U.S. aerospace industry and a lot of what we have done with regard to market access has allowed us to go and place these orders, for which we have contracts in place," Clark said. "I don't want to be seen as threatening or intimidatory but I am hoping that the U.S. government thinks about all of this."
Clark said the airline could provide a "cast iron defense" against subsidy claims and in the Reuters interview hinted at possible legal action over the criticisms, voiced especially by Delta.
"Delta is maligning us, leading people down a path which is based on unsubstantiated false allegations and that is very serious. It could be commercially damaging to us and if it is we will consider all our options," Clark told Reuters.