Emirates poised to respond to US subsidy claims

Emirates poised to respond to US subsidy claims

Emirates is to submit a response to US rivals’ allegations that it has received illegal subsidies, which the Gulf airline calls unfounded.

Leading US carriers want Washington to alter its open skies agreements with the United Arab Emirates and Qatar, accusing them of providing their airlines with more than $40 billion in subsidies and distorting competition.

Emirates, Etihad Airways and Qatar Airways deny the subsidy claims.

Etihad last week filed a 60-page submission to the US, stating in response to the subsidy allegations that it is required to repay shareholder loans.

Emirates president Tim Clark said the carrier would respond to the allegations “sooner than you think”.

But he said he saw no issue to resolve because the open skies agreement only sets out grievance procedures on price actions, not subsidies, Reuters reported.

If the US were to tear up the open skies deal, then by the same logic it would have to cancel anti-trust immunity allowing US carriers to agree joint ventures with foreign carriers, without them falling foul of foreign ownership regulations, he added.

Clark was speaking on the sidelines of the annual meeting of Iata in Miami.

Qatar Airways chief executive, Akbar Al Baker, warned on Monday that any change to the agreements could spark protectionism.

The Partnership for Open & Fair Skies, a lobbying group backed by US airlines, said in response to Clark’s comments that the joint venture agreements brought lower fares.

“The real issue is the billions of dollars of cash infusions propping up the Gulf carriers by the United Arab Emirates and Qatar, which is a violation of our open skies policy between our countries,” it said.

Clark also said he would like to see the lifting of restrictions that prevent foreign carriers from taking more than a minority stake in another airline.

“I would dearly love to see the removal of restrictions on foreign ownership. I don’t believe in taking part-stakes,” he said.


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