The full document was released yesterday at the National Press Club in Washington where Emirates President Sir Tim Clark addressed U.S. legacy carrier allegations with media and the general public. Emirates has also briefed officials from the U.S. Departments of State, Transportation, and Commerce on details of the airline’s response. The full rebuttal can be found here.
Highlights of the analysis provided by Emirates include:
- –Over the last 20 years, Emirates has returned over $3.3 billion to its shareholder in dividends and paid out close to $1 billion to its employees in profit sharing payments.
- –Emirates is not subsidized. Both fuel hedging allegations and related-party transactions claims are false. Emirates paid all fuel hedging contracts through its own cash resources which include letters of credit to meet collateral calls that were issued against Emirates’ credit. In addition, all related-party transactions were conducted at arm’s length.
- –There is no precedent under the Open Skies Agreement or any international trade agreement for treating differences in national labor practices as a “subsidy.”
- –WTO Agreement on Subsidies and Countervailing Measures rules never materialized during the Uruguay Round. However, the GATS agreement explicitly excludes air transport services from being counted as a subsidy.
- –Legacy carriers have received billions of dollars worth of government support, including U.S. Government assumption of airline pension obligations, airline stabilization grants, loan guarantees, grandfathering of airport slots, bankruptcy relief from debt and other obligations, direct grants and tax exemptions to support airport development, grants of antitrust immunity to form market-dominant alliances, protection of the U.S. market from foreign competition, and the prohibition against majority foreign ownership, thereby receiving more than $100 billion in government support since 2002.
According to Emirates, legacy carriers have framed their complaints in terms of narrow commercial interests and asked the U.S. Government to undertake a massive departure from Open Skies policies that made them successful in the first place. Legacy carriers have not argued that the goals of Open Skies, which include increased competition, increased flight frequency, more consumer choice, promotion of business travel and tourism, improved service, and innovation have all been harmed.
As has been previously noted, the U.S.-U.A.E. Business Council believes that any effort to restrict Open Skies policies could have a far-reaching impact on this important bilateral relationship. As such, we continue to advocate for the broader U.S.-U.A.E. relationship in the context of the current debate over Open Skies policies and encourage the Obama Administration to continue to takea careful and balanced review of this important issue.
