‘Will you resign?’, defiant Emirates boss asks U.S. rivals in subsidy row

Emirates president Tim Clark promises to ‘deal a sledgehammer’ blow to report alleging the airline gets unfair government subsidies. (AP)

Emirates president Tim Clark has asked his U.S. counterparts whether they will resign after alleging the Dubai airline receives unfair subsidies – claims he promises to smash with “a sledgehammer” in an upcoming rebuttal.

Emirates, Qatar Airways and Etihad have been accused of breaching “open skies” guidelines by three U.S. carriers, claims the Gulf airlines strenuously deny.

American, Delta and United allege that governments in the UAE and Qatar have given out unfair subsidies amounting to $42 billion over 10 years, prompting the U.S. government to set up a forum to hear the claims.

Tim Clark has previously said he would resign if the subsidy claims prove to be true, and today renewed a vow to prove that the U.S. carriers’ allegations are false in a response the airline is working on.

“If you are wrong, and we show you to be wrong… will you resign? What will you do when this rebuttal comes back at you?,” he said.

Clark, speaking at the Arabian Travel Market (ATM) in Dubai, said the airline will need time to respond in full to a dossier drawn up by the U.S. airlines – pointing out that their 55-page document took two years to compile.

“You could drive a bulldozer through almost everything they wrote about us,” he said. “We will deal a sledgehammer to this report.”

He reiterated assertions that the airline receives no special treatment from the Dubai government.

“We have never been subsidized,” he said. “We have grown this business from when I first came in 1985, from nothing to 235 or 240 aircraft today… And we have done that without state intervention, without state funding.”

Clark stopped short of saying Emirates would pursue court action against the U.S. airlines when questioned on the matter by Al Arabiya News.

But he said the airline was aware of potentially damaging repercussions of the claims against it.

“We are aware that there may be issues that could be damaging to us, both commercially in terms of income reduction or brand. And we will look at those and see where they sit in the overall picture of the rebuttal,” he said. “At the moment… the focus is our response.”

American and United airlines did not immediately respond to a request for comment. Delta Air Lines referred enquiries to the Partnership for Open & Fair Skies, a coalition formed by the three U.S. airlines.

“The governments of Qatar and the UAE have granted Qatar Airways, Etihad Airways and Emirates enormous advantages that undermine fair competition and violate Open Skies policy. We have identified more than $42 billion in subsidies and other unfair advantages in the past decade alone – and we’ve backed up our research by publicly releasing over a thousand pages of supporting documents,” said Jill Zuckman, chief spokesperson for the Partnership for Open & Fair Skies.

“We believe the cold, hard facts speak for themselves. And that is why the Partnership for Open & Fair Skies reiterates its call for the U.S. government to freeze further expansion by these carriers and open government-to-government consultations to resolve this dispute as quickly as possible.”

‘Profitable year’

Emirates is set to announce its financial results on Thursday, with Clark today signaling that they will be positive for the company.

“It’s probably the second most profitable year in our history”, he said, pointing to the decline in fuel prices as helping the airline.

“We increased our income, we increased our production, we took on a lot more fleet, we retired many of the older aircraft,” he said.

European markets such as Greece, Spain, Portugal and Italy are performing particularly well – although Clark said the airline had seen a “dogfight” in Asia.

“Europe came on stronger than we thought it would.” he said.

Geopolitical challenges remained however, with the airline having to shut down five stations overseas, as well as enduring the impact of the strengthening dollar, Clark said. It was forced to ground 22 aircraft last summer due to runway works at Dubai International Airport.

Dubai World Central move

Emirates is currently based at Dubai International Airport, but plans to shift to the new Al Maktoum International Airport at the Dubai World Central complex on the other side of the city.

Previous estimates put the moving date at 2020, but Clark said it is likely to be later than that.

“The scale of what we are trying to do is kind of fazing a few people at the moment… They are having to revisit a lot of the architectural concepts to fit everything in,” he said

“Certainly I think between 2023 and 2025 we'll be down there.”

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Last Update: Wednesday, 20 May 2020 KSA 09:44 - GMT 06:44
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