United's move to stop Dubai service is hypocrisy: Emirates

 

Uniteds move to stop Dubai service is hypocrisy: Emirates

Dubai - "It comes as no surprise that United, like Delta a few weeks ago, has chosen to politicise their decision when they redeploy capacity to maximise profit."

By Issac John

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Published: Thu 10 Dec 2015, 11:00 PM

Last updated: Fri 11 Dec 2015, 8:46 AM

The US carrier United Airlines said on Thursday that it would be ending its service to Dubai, alleging that the rapid expansion of "subsidised" local carriers and the loss of a government contract were forcing it to scrap its nonstop flight from Washington Dulles.
United's move, the latest in an escalating "transatlantic subsidy war", follows a similar step by another US carrier Delta, which announced in October that it would end its Atlanta-Dubai route in February. Like United, Delta blamed "excess capacity" from the Gulf carriers for making its route unprofitable.
An Emirates spokesperson, reacting to United's repeated allegations of subsidy. said: "It comes as no surprise that United, like Delta a few weeks ago, has chosen to politicise their decision when they redeploy capacity to maximise profit.
"Emirates has operated flights between Washington DC and Dubai since September 2012, and has not added significant capacity on the route since. It is disingenuous for United to blame Emirates for their decision to pull out of the route, more than three years after we began services," the Emirates spokesperson told Khaleej Times.
The Dubai-based carrier said United's protest against Jetblue and Emirates' codeshare agreement on the Dulles-Dubai route is also hypocrisy, since United itself serves dozens of destinations, including with Fly America Act contracts, through codeshare agreements where its partner provides similar services.
"Contrary to United's contentions, Emirates is not a 'subsidised government carrier', nor is JetBlue merely a ticketing agent of Emirates. We have comprehensively demonstrated, time and again, that Emirates is run on a fully-commercial and profitable basis, and that we have in fact returned over $3.3 billion in dividends to our owners to date," the spokesperson said.
She said JetBlue and Emirates have a comprehensive worldwide two-way code-sharing relationship. "Every day, numerous Emirates wide-body aircraft arrive at US gateway airports and unload thousands of travellers, many of whom then continue on to destinations inside and outside the United States on JetBlue aircraft - to points that Emirates does not serve on its own, and which due to its codeshare with JetBlue, Emirates is able to offer. Similarly, many JetBlue passengers fly on Emirates-operated aircraft to destinations that Jetblue does not serve with its own aircraft, such as between the US and Dubai."-
In a statement, United said its last flight on the route will be the return from Dubai on January 25.
"Even though we successfully operated the Washington-Dubai route for the past seven years, the entry of subsidised carriers such as Emirates Airline and Etihad Airways into the Washington, DC, market has created an imbalance between supply and demand to the UAE," United said in a statement detailing its exit from the market. "As they have added subsidized capacity, our Washington-Dubai route has become less profitable."
However, what prompted the dramatic exit of United from the UAE operation is the decision by the US government to award a government contract for travel on the Dulles-Dubai route in 2016 to rival JetBlue Airways Corp and its codeshare partner Emirates, which will operate the Washington-Dubai flights.
Emirates will carry an estimated 15,000 US government employees, United said, adding: "We formally protested this decision but were ultimately unsuccessful."
Both US carriers allege "overcapacity" on routes to the region following the expansion of Emirates, Etihad Airways and Qatar Airways, which now serve a dozen US cities with about 200 flights per week.
United said its customers would still be able to book travel to the region via its partners Deutsche Lufthansa AG and Air Canada.
United, along with Delta and American, has been lobbying the US government to restrict the open skies treaty that allows the Gulf airlines to expand rapidly in the American market.
The US trio alleged that the three Gulf carriers have received about $42 billion in subsidies from their respective governments. They claim such funds distort the market and do not provide a level playing field with the US carriers.
However, Gulf airlines have refuted the subsidy allegations, claiming that the US carriers are losing out because of sub-standard customer service.
GCC carriers also say that their growth benefits other aerospace sectors in the US. Emirates, Etihad and Qatar Airways are among the biggest customers of US-based aircraft manufacturer Boeing.
issacjohn@khaleejtimes.com



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