UAE Minister of Economy demands US airlines to show proof behind subsidy claims

Sultan Al Mansouri, the UAE Economy Minister, hit back at criticism of Arabian Gulf airlines during a news conference with his German counterpart yesterday, demanding that those who accuse them of benefiting from government subsidies provide proof.

A dossier compiled by a group of US airlines alleged last month that the UAE's Emirates and Etihad Airways, as well as Qatar Airways, had received more than $40 billion in state subsidies, giving them an unfair advantage. The dossier was part of a renewed wave of criticism from western carriers against the trio, whose growth has hit the businesses of legacy carriers in the US and Europe.

The Gulf carriers denied they received subsidies and said US-based airlines themselves benefited from government help in the aftermath of the 9/11 attacks. “You cannot throw accusations without proof,” Mr Al Mansouri told a news conference alongside the German economy minister Sigmar Gabriel, declining to say whether the pair had discussed the airline subsidy issue.

“The subsidy word is misused in many situations. Unless there’s proof and you put it there, you should not use the word subsidy.”

Mr Al Mansouri said recent heated exchanges between airline executives were not healthy and could affect relations between nations. “We shouldn’t underestimate the value of the aviation industry in terms of its contribution to nations – Germany, the US, Europe,” Mr Al Mansouri said, citing the shared benefits from aircraft purchases, travel and tourism.

Speaking at the same event, Mr Gabriel said: “Of course we have to prove it and discuss it in the existing framework and of course our colleagues and friends must have the possibility to prove the results and then discuss it.”

European carriers – in particular Lufthansa, the region’s largest airline by revenue – have long said one of their biggest challenges comes from Gulf state-owned carriers.

Christoph Franz, Lufthansa's former chief executive, often spoke out against the major Gulf carriers, saying their state-owned status meant they did not compete on a level playing field with privatised carriers because of subsidies. In return, Emirates has long complained about securing landing rights at German airports, especially those in Frankfurt and Munich where Lufthansa has hubs, often blaming the influence of the German carrier for denying them access.

Both ministers indicated there was a need to further discuss the terms of the open skies agreement between the two countries.

Etihad bought a 29 per cent stake in Germany’s second-largest airline, Air Berlin, in a strategy to expand into the European market without the need for substantially more landing slots, and to bring more traffic to its Abu Dhabi hub.

business@thenational.ae

Follow The National's Business section on Twitter