Tim Clark, president of fast-growing, Dubai-owned Emirates
Airline, took vigorous exception Tuesday to claims leveled by the
three largest U.S. carriers that Emirates receives trade-distorting
subsidies from its government owner.
Speaking at the National Press Club in Washington, Mr. Clark
said his company was established 30 years ago under "clear rules of
no subsidies" and hasn't deviated from that approach except for
receiving "seed capital" when it was just getting underway. The
government of Dubai gives "no support for the operation," he said,
and expects Emirates to make its own way.
In late January, American Airlines Group Inc. (AAL), United
Continental Holdings Inc. (UAL) and Delta Air Lines Inc. (DAL)
began circulating to Washington policy makers a 55-page report that
alleges Emirates and its Gulf rivals, Etihad Airways of Abu Dhabi
and Doha-based Qatar Airways, have received more than $40 billion
in subsidies and unfair advantages since 2004. The three big U.S.
airlines are pressing their government to try to persuade the
United Arab Emirates and Qatar to amend their liberal air treaties
with the U.S. to "level the playing field." Failing that, the three
big U.S. airlines want Gulf carrier access to be frozen or for the
treaties to be revoked.
Mr. Clark said he made the rounds in Washington among the same
policy markets and found the discussions "very constructive." He
vowed that his airline will formulate "a line-by-line" response to
the lengthy U.S. report and will "rebut" all the allegations. He
also mentioned "being given the benefit of an apology" by the
people who made them, and questioned the fact that the report
wasn't made public -- and visible to him and his Gulf rivals --
until two weeks ago.
Emirates, which now serves 9 U.S. cities with 84 flights a week,
intends to progress with its plans of growing to serve 20 U.S.
airports, Mr. Clark said. Last year, Emirates delivered 2.4 million
passengers to the U.S., 1.7 million of whom were coming from
multiple points in Africa, the Middle East and other points that
U.S. airlines don't serve. About the three U.S. carriers, he said,
"the smart thing for these guys to do is to work with us, not
against us."
This is not the first time Emirates has been accused of
subsidies, he said. Asked Tuesday about an allegation in the U.S.
carrier report that Emirates unloaded $2.4 billion in fuel-hedging
losses on its government owner, Mr. Clark responded "Tosh." He said
some figures and the conclusions in the report were "incorrect",
but sidestepped a question about whether Emirates or Dubai was
mulling legal action.
Emirates, by far the largest of the three Gulf airlines, said
the U.S. policy of signing liberal "open skies" air treaties with
other nations represented "watershed aeropolitical thinking" that
has moved other countries to open up their skies to foreign
carriers. "I do not believe the United States would be minded to
change its open-skies policy," Mr. Clark added.
He said his company could make the case that U.S. carriers have
received government support, including a $5 billion payment after
the Sept. 11, 2001 terrorist attacks closed U.S. airspace for three
days; a federal loan-guarantee program to prop up U.S. airlines
reeling from the 9/11-induced drop in traffic; the rules of Chapter
11 bankruptcy, which allow U.S. carriers to dump their pension
obligations and take concessions from employees and creditors; and
U.S. policy that allows airlines to create tight revenue- and
cost-sharing joint ventures across oceans with some of their best
airline partners.
The CEO of Etihad Airways made a similar case in a separate
presentation Tuesday in Washington. Representatives of Qatar
Airways couldn't immediately be reached, but its CEO, Akbar Al
Baker has said repeatedly that funds his company receives from the
state are equity, not subsidy. He also has blasted the U.S.
airlines for their poor customer service and old planes.
Write to Susan Carey at susan.carey@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires