Emirates, Etihad, Qatar Airways strike back
One by one leaders of the three feisty, fast-growing and, apparently world-threatening state-owned airlines of the Gulf region – Emirates Airlines, Qatar Airways, and Etihad Airways – publicly denounced the Big 3 US airlines – American, United and Delta – for their aggressive, months-long attack campaign against the finances, character, and integrity of the Gulf carriers.
Emirates’ CEO Sir Tim Clark, a veteran British airline executive who is the guiding force behind Emirates’ rapid international growth, openly mocked the US carriers for their pitiful customer service. “Have you been on a US domestic flight?” Clark asked in an interview with The National, an English-language paper in Abu Dhabi, Emirate’s home country. “It’s like travelling with a low-cost bus company. The terminals are full of frightened people sitting on the floors because they’ve no facilities, being shouted at by airline agents and cabin crew who are stressed themselves because of the working conditions.”
Akbar Al Baker, who has run Qatar Airways for 19 of its 21 years of existence, hosted a Washington, DC news conference at the posh Hay-Adams Hotel where he called the US Big Three “greedy” companies that provide “crap service” to their customers. The reason they’re attacking is that the Big Three “can’t compete” with the extraordinarily high quality service for which Qatar and the other Gulf carriers are famous, Al Baker said.
Etihad’s 19-page report details how the Big 3 (and the airlines they swallowed in consolidation over the last 15 years) has benefitted enormously from government subsidies and supports of various types. Etihad puts the total at US$71.5 billion, including fuel tax waivers and government-backed financing at preferential rates. That dwarfs the US$42 billion in subsidies that the Big Three, in a January report, alleged the three Gulf carriers had received from their governments. The Gulf carriers vehemently deny that they’re government-subsidised operations even though they are government-owned companies.
Jim Callaghan, an Irishman who is Etihad’s General Counsel and Company Secretary, said, “The combined benefits from just their bankruptcy proceedings and pension write-offs – regimes that are rather unique to the United States and which others around the world view as forms of subsidy – is rather astounding,” he said in a Forbes interview. “And we’ve not included the millions in subsidy they get each year through the Civil Reserve Aviation Fleet programme to keep their planes available should there ever be a war, plus the very profitable rates they’d be paid if war was to break out and their planes actually called to duty.
“We’ve tried with this report to be very conservative on these numbers. This is not the full story of how much the big US carriers benefit from government support. There’s a lot more money there. But this is a pretty big number as it is,” he said.
