The CEO of Emirates Airlines said this week that Middle Eastern airlines that have come under fire for allegedly receiving subsidies from their government owners are “too important” to the U.S. economy to block from flying to domestic airports.
Unions that represent employees of the largest U.S. airlines, known collectively as the Big Three, have alleged Middle Eastern airlines like Qatar Airways, Etihad Airways and Emirates Airlines received more than $42 billion in subsidies since 2004.
The major U.S. airlines — Delta, United and American — say the payments to their Middle Eastern competitors violate the spirit of the Open Skies agreements between the U.S. and the governments of Qatar and the United Arab Emirates, which own the airlines.
{mosads}They want the Obama administration to launch a review of the claims with the Middle Eastern governments, which would involve a delicate set of negotiations that critics said would upset other areas of foreign relations.
Emirates CEO Tim Clark said in an interview with the British BBC network that he thinks the Obama administration will ultimately ignore the U.S. airlines’ complaints to preserve the Open Skies agreements with the Gulf nations.
“It is far too important for the US economy for multiple reasons for the activities of the Gulf carriers to be cut back, because once you do that and you start closing the Open Skies that you have today, there’s enormous ramifications,” he said.
“The US economy would be severely affected by a closure, shutting down of the Open Skies arrangement which has manifested, produced huge amounts of wealth for aerospace, Boeing, General Electric… as well as everything else,” he continued.
Travel and consumer groups have argued that U.S. airlines are making the allegations of Open Skies violations against the Middle Eastern carriers because they are trying to prevent competition for international flights.
Unions that represent the employees of the largest U.S. airlines have formed campaigns to pressure the Obama administration to question the Gulf carrier subsidies.
“We agree … that Open Skies agreements have benefited the United States and we stand behind these valuable policies,” Partnership for Open and Fair Skies spokeswoman Jill Zuckman said in a statement. “But when other countries aren’t abiding by their end of the deal, the U.S. needs to stand up for its aviation industry and enforce the rules.
“In this case, Open Skies is clear — subsidies are a violation of the policy,” she continued. “The more than $42 billion in subsidies and unfair benefits provided by Qatar and the United Arab Emirates (UAE) to Qatar Airways, Etihad Airways and Emirates have been well documented, as has the fact that these airlines have created no new demand among passengers.”
The Obama administration launched a domestic review of the claims against the Gulf airlines, but it falls far short of the full-scale international negotiation Big Three U.S. carriers have called for.
Clark dismissed the complaints from U.S. airlines as sour grapes because of the efficiency that has been achieved by Gulf carriers on international routes that have historically been expensive to operate.
“People simply can’t believe that we have an airline of this size in 30 years, buying huge numbers of aircraft, brand new, successfully deploying them on markets all over the world and making quite a lot of money,” he said.
“That’s kind of not how the airline industry has performed over the last 50 years, I’m sorry to say,” Clark concluded.