Etihad Airways chief warns European carriers against protectionism

'If our growth is curtailed or our investments in airlines are compromised, the real damage will be to Europe in lost jobs, lost flight connectivity, lost investment in local and national economies and lost consumer choice'.

Etihad Airways chief executive James Hogan. Karim Sahib / AFP
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The boss of Abu Dhabi’s Etihad Airways has warned Europe that it will suffer if it restricts the access of foreign carriers to its market, in a fresh effort by fast-growing Gulf airlines to head off what they see as Western protectionism.

Chief executive James Hogan met with the European Union’s Transport Commissioner Violeta Bulc this week to stress the benefits of Etihad’s operations to European consumers and economies, an Etihad statement said on Wednesday.

“Etihad Airways is committed to Europe. But growing resistance to us from a handful of protectionist competitors could have unintended consequences well beyond limiting our development,” the statement quoted Mr Hogan as saying.

“If our growth is curtailed or our investments in airlines are compromised, the real damage will be to Europe in lost jobs, lost flight connectivity, lost investment in local and national economies and lost consumer choice.”

State-owned Etihad is making increasing inroads into Europe, partly through equity investments in Air Berlin, Air Serbia, Aer Lingus and Alitalia.

This has aroused opposition from European carriers such as Air France-KLM and Lufthansa, which along with some US competitors have long complained that the Gulf airlines are benefiting unfairly from interest-free government loans and cheap fuel. The Gulf carriers deny those accusations.

The Etihad statement did not say which particular business issues Mr Hogan was concerned about in Europe, and a spokesman for the airline declined to comment on Wednesday.

Under a bilateral traffic agreement between the UAE and Germany, UAE carriers may fly to only four German airports: Frankfurt, Munich, Hamburg and Duesseldorf.

Last month Germany approved a summer flight schedule allowing Air Berlin and Etihad to share some flights not covered by the agreement, such as Berlin-Abu Dhabi and Stuttgart-Abu Dhabi, but the German transport ministry said last week this “should remain an exception”.

Emirates Airline, based in neighbouring Dubai, has also responded strongly to Western criticism. The airline rejects all allegations of unfair subsidies made by US airlines and will expect an apology from them, Emirates president Tim Clark said last month.

Etihad’s core operations in the EU contributed $1 billion to the combined GDP of the 28 EU nations last year and supported more than 11,000 jobs there, Mr Hogan said. Its purchases of European aircraft and equipment contributed more.

Meanwhile, potential changes to US Open Skies pacts with Qatar and the UAE could involve new rules on price-lowering and capacity-dumping, Delta Air Lines chief executive Richard Anderson said on Wednesday.

The remarks during a conference call on the company’s earnings represented one of the clearest statements yet by US airlines on what they hope talks between the US and the Gulf nations would achieve if they take place.

“We’re in the process of answering questions (from the US government),” Mr Anderson said, “and the end result needs to be like the Chinese steel case or agricultural cases that the US frequently brings (to the World Trade Organization), where you come up with remedies that will address a subsidy.”

The Obama administration on Friday solicited comments on the debate and said it expected to begin reviewing submissions by the end of May.

The government has not indicated whether it would discuss the subsidy claims with Qatar and the UAE.

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