x Abu Dhabi, UAEThursday 27 July 2017

Etihad and Emirates team-up over aircraft funding

Two of the UAE's high flyers are coming to the defence of European and American rivals as Etihad and Emirates Airline team-up to lobby the OECD on funding rules.

United Arab Emirates - Abu Dhabi - November 10th, 2010: An Etihad Aeroplane practices a flyover at Yas Circuit that will be preformed on race day. (Galen Clarke/The National)
United Arab Emirates - Abu Dhabi - November 10th, 2010: An Etihad Aeroplane practices a flyover at Yas Circuit that will be preformed on race day. (Galen Clarke/The National)

Etihad Airways and Emirates Airline have flown to the support of some of their largest rivals by lobbying the OECD to allow European and American airlines to receive government support on Boeing an Airbus purchases, called export credits.

The two UAE carriers are among 10 international carriers that have formed a group called Aviation Alliance, whose primary goal is to end the "Home Country" rule, which prevents airlines based in the countries that produce Airbus and Boeing planes from receiving government-backed loans at attractive rates.

The bipartisan effort comes after airlines such as Air France and British Airways have criticised Gulf carriers from unfairly benefitting from export credit assistance to support their ambitious fleet growth plans.

"We are calling for the 'Home Country' rule to be removed, export credit structures to be enhanced, the maintenance of the existing exposure fees and the structures governing the proportion of an aircraft that can be financed using export credits," said Howard Millar, a spokesman for the alliance.

The group's other members include Oman Air, Pegasus Airlines of Turkey, Ryanair of Ireland, Virgin Blue of Australia, Korean Air, Norwegian, Wizz Air of Hungary, and Cargolux of Luxemberg.

Etihad has said it relies on export credit guarantees for 14 per cent of aircraft purchases, while Emirates uses the financing tool for just over 20 per cent.

igale@thenational.ae