EU seeks new mandate in aviation talks with GCC

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EU seeks new mandate in aviation talks with GCC

European Union Transport Commissioner Violeta Bulc, citing “distortions in the market”, said she would seek a new mandate from EU countries to open talks with the UAE, Qatar and Saudi Arabia over “unfair subsidies to airlines”.

By Isaac John (associate Business Editor)

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Published: Sat 21 Mar 2015, 12:14 AM

Last updated: Fri 26 Jun 2015, 12:21 AM

Dubai — The battle between US and Gulf airlines on “subsidy versus protectionism” issue escalated with the European Union officially joining the fray amid a call by American airlines for imposing a ban on Gulf carriers’ flights from outside the region.

European Union Transport Commissioner Violeta Bulc, citing “distortions in the market”,  said she would seek a new mandate from EU countries to open talks with the UAE, Qatar and Saudi Arabia over “unfair subsidies to airlines”.EU seeks new mandate in aviation talks with GCC

In a statement, Bulc said the request for talks with Gulf states was initiated by France and Germany. She pointed to the study recently issued by major US airlines alleging more than $40 billion in state aid to Gulf airlines over the last decade. “Gulf carriers compete with Europe’s airlines on international flights,” Bulc said. “The subsidies they receive create distortions in the market, denting the competitiveness of EU and US carriers.”

Speaking to the Press after the council meeting in Brussels, Bulc said European aviation is “very much challenged by competitiveness right now and we need to address it in a more comprehensive way.”

The Partnership for Open & Fair Skies — a coalition of the largest three US airlines and four labour unions representing pilots, flight attendants, and maintenance workers — applauded the decision by Bulc. 

“We applaud the EU for taking this important step. It’s a strong signal of the momentum that’s been generated as more and more people learn about the billions of dollars in unfair subsidies that Qatar and the UAE are pumping into Qatar Airways, Etihad Airways and Emirates airline,” said Jill Zuckman, spokesperson for the Partnership for Open & Fair Skies.

Germany and France also requested the mandate in a joint letter from Alain Vidalies, French Secretary of State for Transport and Alexander Dobrindt, his German counterpart. They had alleged that “European airlines are losing market share against the Gulf airlines, because of their unfair competitive practices, and in particular because of the significant public subsidies and guarantees they enjoy.”

In addition, France and Germany have each imposed a freeze on additional flights by the Gulf carriers into their countries until a resolution is reached on the issue of subsidies.

Rejecting the allegations as “incorrect,” Emirates airline and Etihad Airways had launched a counter attack against the protectionist agenda of the US carriers.

Rebutting  allegations of subsidy and “stealing traffic,” Dubai-based Emirates warned that American consumers and regional state economies would be the ultimate victims of such protectionist campaign.

President of Emirates Sir Tim Clark said 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. We will rebut all the things that are said about us. Once we have done that, I expect to be given the benefit of an apology from people who have actually made these allegations”.

Etihad Airways Chief Executive Officer James Hogan, maintaining that his carrier is engaged in fair business competition, said: “We believe competition is good. We believe we act fairly.” He insisted that Etihad would not make any apologies for offering new competitive choice for air travellers.

— issacjohn@khaleejtimes.com



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