US legacy carriers got the facts wrong, got the law wrong, and set their sights on an outcome that will be wrong for American consumers, communities and the national economy
Emirates today released its point-by-point, fact-based response to allegations of subsidy and unfair competition leveled by the “big three” US legacy carriers – Delta, United and American Airlines.
The full document was released to the media and public, following meetings yesterday where an Emirates delegation briefed officials from the US Departments of State, Transportation, and Commerce on the airline’s response.
The US legacy carriers launched an aggressive lobbying campaign in January, in a protectionist bid to restrict consumer choice, and restrict the growth of international flights to the USA operated by Emirates and other Gulf airlines. Only on 5 March did the US legacy carriers publicly release their 55-page white paper which presented so-called “evidence” of Emirates receiving subsidy and competing unfairly. Full appendices to the 55-pager were not made public until 21 April.
Sir Tim Clark, President Emirates Airline said: “The methods employed by the US legacy carriers to discredit Emirates have been surprising and frankly, repugnant. We do not underestimate their lobbying prowess, but facts are facts. Unlike the Big 3’s white paper, which is riddled with inaccuracies, conjecture, and legal misinterpretations, Emirates’ response is comprehensive and based on hard facts. We clearly show why the Big 3 have no grounds to ask the US government to unilaterally freeze Emirates’ operations to the USA or pursue other action under the Open Skies agreement. It is because we are absolutely not subsidized, and our operations do not harm these legacy carriers, but instead benefit consumers, communities and America’s national economy.”
US legacy carriers are wrong on facts: Emirates is not subsidized
Emirates’ response systematically disproves each of the Big 3’s allegations that it has received over $6 billion in subsidies, including fuel hedging subsidies; purchasing goods and services from related third parties at below-market terms; disproportionately benefiting from airport infrastructure and user fee at Dubai International airport; and having an artificial cost advantage through the structure of the UAE’s labor law.[i]
Sir Tim said: “The subsidy allegations put forward by the Big 3 are patently false. We have been profitable for 27 years straight, and unlike our accusers, we have never depended on government bail-outs or protection from competition. In fact, we were told right from the start by the government of Dubai that Emirates has to deliver profits and stand on its own feet. We had to then, and we still have to now. Dubai has no oil reserves to speak of, and therefore it embarked on a well-documented strategy to diversify its economy with air transport as a key enabler. That directive is what led us to pioneer a successful business model as an efficient long-haul connector that offers customers a best-in-class experience.
“Our global expansion is funded from our own cash flow, and debt raised in the open market through banks and financial institutions. Our success is due to superior commercial performance. To date we have paid our shareholder, the Dubai government, more than $3 billion in dividends. All of this is laid out in our financials, audited by Pricewaterhouse Coopers. We are financially transparent, and have published fully audited accounts for over 20 years.”
