Alliances brush aside Emirates anti-competitive charge

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The three global alliances have dismissed accusations by Emirates about anti-competitive behaviour, reiterating their long-held belief that the Gulf carriers' unique business models give them an unfair advantage over their legacy rivals.

In a document entitled "Aviation at the Crossroads - Safeguarding Competition and Consumer Choice", Emirates says that the scale of consolidation through the alliances, coupled with their anti-trust immunity in certain markets, creates a "join or perish" commercial incentive for non-aligned airlines. "The emergence of three mega-alliances presents public policy concerns that merit careful attention", and could "harm consumers", it adds.

Emirates in the document accuses the global alliance members of "co-ordinated attacks" on the Dubai flag carrier and its fellow Gulf airlines with "false, unsubstantiated accusations" about state support and subsidies and a lack of financial transparency. "Denying the travelling public an independent alternative is the goal of some of these European rivals," it adds.

Emirates Airline president Tim Clark told Flightglobal that the immunity deals that alliances have secured, along with the way they "carve up" networks and control hub feeds through their members could be viewed as "the biggest cartel you've ever seen".

When challenged about the Emirates accusations at the Airline Business Alliances, Joint Ventures and Partnerships conference in Rome this week, the alliances were dismissive.

"I think it's ludicrous that one of the Gulf carriers would accuse somebody else of being anti-competitive," said Oneworld CEO Bruce Ashby.

Star's vice president corporate office Christian Klick said that the Gulf carriers "have a completely different business model which is driven by the aspirations of the countries who support the individual airlines through all means".

In its document Emirates has reproduced a PowerPoint slide from a Star Alliance meeting held in Auckland in 2005 entitled "How can we react to the EK [Emirates] threat", which included points such as "Lobby with governments", "Try to prove state subsidies", "Stop interlining" and "Stop filling their planes", or in other words, cease interline and codeshare agreements.

But Klick dismissed the slide by saying: "They're using documents from 2005".

Regarding the Gulf carriers' "different business model", Klick said: "I would love to have this same kind of environment in other parts of the world, where governments don't put ETS [emissions taxation] on you, night curfews on your airports or taxes on your employees and so on. If we had all this then competition would be fair and balanced and as long as it's not, then we have an argument with those guys."