US-Gulf row 'fracturing' aviation world, says airline chief

US-Gulf row 'fracturing' aviation world, says airline chief

The row triggered by US allegations of government subsidies to the Gulf carriers could break up the OneWorld alliance of which British Airways is a leading member.

Emirates president Sir Tim Clark declared the aviation world is "dismembering" and said: "There is a realignment of businesses."

Referring to claims by American Airlines, United and Delta Airlines that Emirates, Etihad and Qatar Airways received government hand-outs, Clark said: "Their joint-venture partners are not part of this."

BA parent International Airlines Group (IAG) is a joint-venture partner of American Airlines and the carriers sit at the core of the OneWorld airline alliance.

American, United and Delta Air Lines published a report in March alleging the Gulf carriers received more than $40 billion in hand-outs. The US government began an investigation in April.

IAG quit the Association of European Airlines (AEA) last month amid disagreement on the members' stance towards the allegations.

Qatar Airways owns a 10% stake in IAG. Air Berlin and Alitalia, in which Etihad Airways holds substantial stakes, also left the AEA.

Speaking at the Arabian Travel Market in Dubai yesterday, Clark said: "You're seeing the beginning of a fracturing of the industry globally - the dismembering of the aviation world order as we know it.

"Look at the way IAG moved out of the AEA and joined the low-cost carrier association.

"There is a realignment of businesses. There will be those clinging to the vestiges of alliances and those that break away."

Clark said: "OneWorld is probably the alliance that is most loosely structured. But IAG is an anchor tenant of OneWorld.

"Willie Walsh wrote to the three US chief executives saying, 'IAG does not agree with you and we don't support you', and he said that publically."

Clark praised Walsh, IAG chief executive, saying: "Willie is a product of the new thinking – that the way it was is not the way it is going to be."

The Emirates boss also hailed the turnaround at Iberia under Walsh and IAG, saying: "It is an incredible feat for Willie and that team to have turned around Iberia."

 

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