Study shows Etihad Airways supports 23,400 US jobs and delivers $2.9 billion to US economy

The study, commissioned by Etihad Airways, projects that by 2020, the airline’s operating expenditure and capital investments will almost double to support 46,200 American jobs and deliver US$6.2 billion a year.

These are among the key conclusions of the Oxford Economics Report, released today by Vijay Poonoosamy, vice president international and public affairs of Etihad Airways, to quantify the economic contribution which the airline makes to the US.

The study, which is now published on www.keeptheskiesopen.com, assessed the airline’s capital expenditure with US suppliers and its operating expenditure in the country to calculate a value for direct, indirect, induced and catalytic contributions.

“Open Skies is good for competition and good for the consumer, but most of all today’s report shows it is also good for the American economy,” said Poonoosamy.

“Since 2005, the year before we started flying to America, our expenditure and activities in the US market have supported thousands of jobs and helped to fuel domestic economic growth,” he said.

“By 2020, Oxford Economics calculates that we will have committed US$41 billion to the US GDP through a combination of direct expenditure on our day-to-day operations in the US and our long-term relationships with American partners including Boeing, GE Aircraft Engines and Sabre Airline Solutions.”

Since 2004, when it announced plans to acquire five Boeing 777-300ER aircraft, Etihad Airways has introduced or ordered almost120 Boeing aircraft at a current list price of US$36.5 billion, including more than 70 B787 Dreamliner and 25 next-generation B777X aircraft. The airline has also chosen US suppliers for other equipment ranging from cabin interiors to inflight entertainment systems.

Poonoosamy said a number of US airlines were also beneficiaries of Etihad Airways’ presence in the US market.

In 2014, Etihad Airways delivered 182,000 connecting passengers onto US airlines including American, United, Delta and Jet Blue.  This is forecast to grow to approximately 300,000 in 2015, an increase of 65 per cent, following the introduction last year of new routes to Los Angeles, San Francisco and Dallas Fort Worth.

“Put into perspective, that’s equivalent to five full Boeing 737-800 flights every day of the year,”  said Poonoosamy.

In addition to the airline’s direct expenditure, Oxford Economics says a further US$1.3 billion will be spent in America by the 260,000 international visitors which Etihad Airways expects to carry to the US this year from a range of markets, including countries across the Middle East and Indian sub-continent.

The economic benefits of connectivity between the US and destinations in the Etihad Airways network have been valued by Oxford Economics at US$410 million this year, rising to an expected US$850 million by 2020.

Poonoosamy said Etihad Airways’ presence in the US market had generated economic activity for third party organizations including hotels, ground transport providers and a wide range travel industry partners.

The airline’s economic contribution is further strengthened by its cargo activities, which will contribute to the movement of 80,000 tonnes of freight to and from the US this year. In addition to the freight space in the bellies of its passenger jets, Etihad Airways has formed a strong partnership with the US aviation company Atlas Air, which operates three Boeing 747 freighters on behalf of Etihad Cargo. 

“Our most important contribution to the US is choice,” Mr Poonoosamy said. “We deliver increased options for consumers, and through our exceptional inflight service between the US, Abu Dhabi and beyond we connect American travelers to destinations which were poorly connected, or perhaps not connected at all.”

“We are all growing as a result of Open Skies,” he said. “That is good for the airlines, good for the US economy and good for customers.”

Analyst Saj Ahmad commented on the study: “While the big three US airlines continue to level baseless accusations at Qatar Airways, Emirates and Etihad, the big Gulf carriers have rightfully been highlighting how their services to the United States is beneficial.

“If we look solely at Etihad's figure of almost $40bn worth of Boeing 777-300ER, 777X and 787s that the airline has ordered in the last decade, that value is far more than each of the US airlines.

"Emirates too, holds the biggest Boeing order to date with 150 777X's valued well over $75bn. This figure alone dwarfs all the widebody buys that United, Delta and American have made from Boeing in the last 10 years. All in, with its existing 777 orders since the type was launched, Emirates has ordered more Boeing jets and secured more US aviation and aerospace jobs on its own compared to the US airlines named over the last 25 years. We're literally talking over $100bn including engines, cabin and IFE furnishings as well as continued product support.

“Instead, the likes of Delta and American have damaged the US aviation jobs scene by buying billions of dollar's worth of Airbus jets - jets which are heavily subsidized by the European taxpayer. Orders like that harm Boeing and GE and jobs that they create in the wider supply chain, but US airlines like Delta and American never like to mention this. It's pretty obvious why - it would make them two-faced and their arguments against Gulf airlines even more worthless than they are already.

“Equally, when you add in the fact that since 1985, US airlines were at the top of the international tree when it came to growth.

“They deliberately looked to avoid regions like Africa and the Middle East. They now cannot complain that Gulf carriers have an advantage because they have opened services, which US airlines to date, refuse to fly and compete on.”

Ahmad added: “Airlines like FedEx and JetBlue welcome the open skies deals because it opens up new markets for them.

“The likes of United, American and Delta are stuck in a 1970s time warp where regulation is key. That is not the case today and they can't seem to accept that their failure to serve beyond the USA is their own fault.

“Arguments about lost profit is nonsense too. US airlines have been raking in hundreds of millions on the back of domestic US traffic. This is a market Gulf airlines have no access to so they can't complain about any financial losses here. On the international stage, that argument is even more flawed because they barely have more than one token flight to the Middle East, so they can't whine about "losses" when they have systematically failed to launch routes from the US' major cities like the Gulf airlines have.

“Quite frankly, the entire thesis upon which US airlines base their whining is flawed. They only have to look at their European brethren to see the likes of British Airways embracing Qatar Airways. Alitalia and Air France-KLM are aligned with Etihad and in the Australasian market, Qantas is aligned with Emirates.

“US airlines would be better off keeping their diatribes to themselves and concentrate on partnering Gulf airlines if they can't compete head to head. If they fail to do this, then they deserve to lose out market share because in all honesty, US airline quality is completely inferior to the superb and timeless products by Emirates, Qatar Airways and Etihad. And it's this facet that US airlines simply cannot handle - that passengers want value and premium for their money - they simply aren't interested in what US airlines have to offer any more.”