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Emirates denies subsidy claims

WASHINGTON, DC: American, Delta and United have asked the Obama Administration to review its Open Skies agreement with the UAE and Qatar alleging Emirates, Qatar Airways and Etihad have received US$42 billion in anti-competitive subsidies.

The move follows last month's declaration by FedEx saying the U.S. government "should not capitulate to the interests of a few carriers who stand ready to put their narrow, protectionist interests ahead of the economic benefit that Open Skies provides to the people of the United States".

The three U.S. carriers, supported by the Association of Professional Flight Attendants (APFA), the Teamsters union and the Allied Pilots Association, have launched a lobbying campaign based on a 55-page 'white paper' that claims the Gulf airlines have been subsidized by their respective governments since 2004.

Tim-Clark-President-Emirates-AirlineEmirates Airline president Tim Clark (right) responded saying: "All the debate about what constitutes a subsidy, what is fair or unfair competition under whose laws... are just distractions from the real issue at hand – which is that the three biggest U.S. carriers, who together with their joint-venture partners already control about two-thirds of international flights from the USA, want to further limit the international air transport choices available to American consumers, airports, local and regional economies."

Clark said consumers should ask the three U.S. carriers why they are among the most profitable airlines in the world but "nowhere close" to being ranked best for service or product.

Addressing the allegation of subsidies, Clark commented: "One can argue that the three largest US carriers themselves enjoy a number of unfair advantages including access to the world's largest aviation market in their own backyard, anti-trust immunity for their joint-ventures with whom they co-ordinate prices and capacity under anti-trust immunity, Chapter 11 and pension relief legislation, various types of support from individual U.S. states, and fuel tax breaks."

According to Emirates, it has carried 470,000 tonnes of airfreight between a total of nine U.S. points and Dubai since the airline began flying to New York in 2004 - making Dubai the No.1 U.S. export market in the Middle East with growth of 503 percent in 10 years.

"The three U.S. carriers' obsession with market share makes all the more apparent what they are really after: not competition, not open markets or Open Skies, but outright government directed market allocation. Considering there is hardly any overlap between Emirates' route network and that of Delta, American or United, this campaign by the U.S. carriers is really about them protecting the revenue they earn from their joint-venture partners," Clark said.

Emirates says it is in the process of producing a "point-by-point" rebuttal of the allegations.

Meanwhile, despite support from the APFA for the Delta, United and American subsidy petition, it is the International Association of Machinists and Aerospace Workers (IAM) that is supporting the unionization of Delta's flight attendants. With a vote due in the spring or early summer, some 12,000 out of a total of 20,000 cabin staff are reportedly supporting the move at the largely non-union airline.

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