Etihad debunks US rivals' subsidy claims

Etihad debunks US rivals' subsidy claims

Etihad Airways hit back at claims by major US carriers that it has benefited from government subsidies with a report countering a study produced by Delta Air Lines, American Airlines and United in March.

Abu Dhabi-based Etihad said its report, commissioned from US consultancy Edgeworth Economics, “challenged and debunked” the US carriers’ claims.

American, United and Delta alleged Gulf carriers Etihad, Emirates and Qatar Airways received more than $40 billion in hand-outs over the last 10 years.

The US government began an investigation into the allegations in April. Etihad confirmed it would file a full response to the US government by the end of this month.

The carrier said: “Contrary to claims by Delta Air Lines, American Airlines and United, services introduced by Etihad and other Gulf carriers to the US have increased competition and consumer choice.

“Traffic numbers to markets in which these carriers compete with Etihad have increased in many cases.”

It said the Edgeworth Economics study found that on routes where Etihad competes with the US carriers and their alliance partners, ”these airlines carried more passengers despite having lost market share on certain routes”.

Etihad added: “Etihad Airways’ pricing on these routes is competitive. Etihad’s growth is not excessive, as claimed by the three US carriers.”

It said the Edgeworth report “identifies fundamental flaws” in the US airlines’ claims and queries the evidence for subsidies, while establishing there is “no causal link between any alleged subsidies and any claimed harm to the US airlines”.

Etihad Airways chief strategy and planning officer Kevin Knight said: “The claims made by the three US carriers that Etihad and other Gulf carriers are damaging their business and taking ‘their’ passengers are not only false but arrogant.

“They do not own these passengers nor do they have a right to them.” He pointed out that Etihad fed 182,000 passengers on to US carriers in 2014.

The report is the second produced by Etihad in response to the US claims. It published a study in mid-May suggesting the US airlines had enjoyed benefits worth more than $70 billion since 2000 ue to government support.

Etihad said at the time of the earlier release: “We do not question the legitimacy of benefits provided to US carriers by the US government and the bankruptcy courts.

“We simply wish to highlight the fact that US carriers have been benefitting and continue to benefit from a highly favourable legal regime.”

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