Emirates Airline says it was assured by the US government that it would assess the ongoing dispute over alleged subsidies to Gulf carriers, without being influenced by the three US mainline carriers.
“We were assured by each department that they would examine this case on the facts, that they would not be influenced by theatre, tactics, or whatever,” says Emirates president Tim Clark at a media briefing in Washington DC today.
Clark met on 29 June with officials from the Departments of Transportation, State and Commerce. The three agencies are tasked with reviewing the allegations of Delta Air Lines, American Airlines and United Airlines that Emirates, Qatar Airways and Etihad Airways have received more than $42 billion in state subsidies.
Emirates filed its formal response to the allegations today. The 210-page report is a point-by-point rebuttal of the US carriers’ accusations, says Emirates. The US mainline carriers in March released a white paper detailing the alleged subsidies received by the Gulf carriers.
It is not immediately clear when the US government will take a decision, if any, in handling the US carriers’ complaints. Delta, American and United are calling for the US government to stop the Gulf carriers from adding new flights to the USA and begin talks with the UAE and Qatar, but this has not happened. Clark says today that US officials have not asked Emirates to hold off on adding new capacity.
Clark reckons that the three US agencies will likely review the allegations in “July or August”. “They’ve been receptive, they’ve been listening. They’ve been very anxious to receive this document to put some balance in the argument,” he says. “This inter-agency group will eventually - I hope - come up with an assessment from the facts and do the right thing.”
In Emirates’ response, the Dubai-based carrier rebuts the US carriers’ allegations, including those that claim Emirates had its fuel hedging losses assumed by the Dubai government and that the airline had paid below market rates for products and services.
The US carriers say that the Dubai government gave Emirates a multi-billion dollar subsidy by assuming its fuel hedging losses in 2008 to 2009 when fuel prices were volatile.
In response, Emirates says it had transferred its fuel hedging contracts to state-owned fund Investment Corporation of Dubai (ICD) to avoid a misleading picture of its operating results due to mark to market paper losses. Delta took the same position in its 2009 financial results, points out Emirates.
The fuel hedging losses were ultimately paid using Emirates’ resources, says the Gulf carrier. The airline paid dividends to ICD, and the fund eventually made a profit of $100 million in net fuel hedging gains, says Emirates.
Emirates also refutes allegations that it paid below market rates for jet fuel and airport fees at Dubai International airport, among other services.
The US carriers and their unions, which have formed a coalition to lobby the US government for action on the Gulf subsidies allegations, were quick to respond today to Emirates’ filing.
“Emirates can submit as many pages as it wants, but it still won’t paper over what has been well-documented: Emirates has received billions in subsidies and unfair benefits from the treasury of the UAE,” says a spokesperson for the Partnership for Open and Fair Skies. “We respectfully ask that the US government request consultations with Qatar and the UAE, and stand up against these unfair government subsidies that violate our open skies agreement.”
The issue has sharply divided the airline industry. US carriers JetBlue Airways, Hawaiian Airlines and FedEx have called on the US government to ignore the mainline carriers’ call for action. Delta, American and United have been backed by Lufthansa and Air Canada in their campaign.
Source: Cirium Dashboard
