Emi­rates urges cau­tion on EU-level avi­a­tion agree­ment with Gulf

Kuwait Times - - BUSINESS -

BRUSSELS: Emi­rates has writ­ten to sev­eral Euro­pean gov­ern­ments ex­press­ing con­cern that its fly­ing rights could be frozen if the Euro­pean Com­mis­sion is al­lowed to use avi­a­tion ne­go­ti­a­tions with Gulf coun­tries as a way to chal­lenge al­leged il­le­gal state sub­si­dies to Gulf air­lines. The Com­mis­sion, the Euro­pean Union’s ex­ec­u­tive, is ex­pected to ask mem­ber states for a man­date to start talks on fly­ing agree­ments with the Gulf coun­tries and oth­ers such as China and Tur­key when it presents an avi­a­tion pack­age in De­cem­ber.

How­ever, some Euro­pean coun­tries, no­tably France and Ger­many, have pushed the Com­mis­sion to use a com­mer­cial avi­a­tion agree­ment with the Gulf coun­tries as a way to tackle al­leged sub­si­dies to car­ri­ers like Emi­rates, Eti­had Air­ways and Qatar Air­ways. The de­bate on un­fair com­pe­ti­tion from the Gulf car­ri­ers has been rag­ing in both Europe and the United States, where sev­eral air­lines are cam­paign­ing to per­suade Wash­ing­ton to al­ter com­mer­cial fly­ing ar­range­ments with Qatar and the United Arab Emi­rates.

In a let­ter to Hun­gary, seen by Reuters, the com­pany’s Pres­i­dent Ti­mothy Clark says hand­ing power to the Com­mis­sion to ini­ti­ate talks “on the wrong terms” would un­der­mine con­nec­tiv­ity and tourism growth in Europe.

“It has come to our at­ten­tion that there has been grow­ing pres­sure on the Euro­pean Com­mis­sion from the French and Ger­man Trans­port Min­is­ters to en­sure con­di­tions are vir­tu­ally im­pos­si­ble for all sides to ad­here to, thereby freez­ing Emi­rates’ fly­ing rights as long as any ne­go­ti­a­tions are on­go­ing,” the let­ter says.

Emi­rates sent let­ters to gov­ern­ments in its ma­jor mar­kets in Europe. Ger­many’s Lufthansa and France’s Air France KLM have spo­ken out against what they see as un­fair com­pe­ti­tion from the Gulf car­ri­ers.

Emi­rates has firmly de­nied re­ceiv­ing sub­si­dies. In the let­ter Clark says Emi­rates has been prof­itable for the last 27 years and sup­ported 85,100 jobs across the EU in 2013-14.

“Rather than re­ceive sub­si­dies as er­ro­neously al­leged, Emi­rates has in fact paid its state share­holder over $3.363 bil­lion in div­i­dends up to and in­clud­ing its 2014-15 fi­nan­cial year.”

The Com­mis­sion is work­ing on a leg­isla­tive pro­posal to tackle un­fair com­pe­ti­tion from non-EU air­lines which could in­clude the abil­ity to sus­pend air traf­fic rights, ac­cord­ing to a doc­u­ment seen by Reuters. It is also de­vel­op­ing a “fair com­pe­ti­tion” clause to be in­serted in com­mer­cial fly­ing agree­ments with non-EU coun­tries.

A spokesman for the Com­mis­sion said fair com­pe­ti­tion would be ad­dressed as part of the “com­pre­hen­sive agree­ments the Com­mis­sion aims to dis­cuss with sev­eral coun­tries.”

“The need to en­sure a level play­ing field when lib­er­al­is­ing is widely recog­nised in­ter­na­tion­ally,” said Jakub Adamow­icz. An Emi­rates spokes­woman said the air­line re­mained com­mit­ted to de­vel­op­ing its Euro­pean oper­a­tions and reg­u­larly en­gages with gov­ern­ments on var­i­ous mat­ters, but de­clined to elab­o­rate on de­tails of spe­cific com­mu­ni­ca­tions. —Reuters

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