To use a popular Australian term, Emirates is telling critics who insist it is subsidised to ‘put up or shut up’.
In a blunt paywall protected interview in the Financial Times and circulated on its First FT daily emails heads-up, Emirates President and CEO Sir Tim Clark has challenged its critics in the management of US carriers and their congressional supporters to an open, public, line by line discussion of the issues and the financial records of the Dubai based airline.
To go a bit further than the FT article goes, the context is an hysterical series of attacks in America on the success of the UAE carrier, as well as its ambitious peers, Etihad and Qatar Airways in support of reversing US Open Skies policy settings and crippling their use to grow traffic between American and Gulf state hubs.
Clark is meeting US transport officials and others in Washington DC this week to tackle the claims that subsidies that have funded Emirates growth.
He will be arguing the distinction between the sovereign owners of Emirates daring to set up an airline with their own money, and its subsequent independently audited financial records of its performance year on year.
(The Emirates case about subsidy allegations is made in this document, with the title page summary shown below.)
Clark told the FT that if commercial damage to Emirates could be established by the current campaign in Congress against it, all options for redress would be considered.
The bald truth is that the in the eyes of its critics, the trouble with Emirates is that it is both Arab and successful, and represents growth in parts of the world that hubbing aside, those same critics don’t understand or refuse to acknowledge.
In Australia some of the most virulent criticism of Emirates came from Qantas, including from group CEO Alan Joyce, right up to the moment a business partnership with the carrier was put in place. The criticism that continues mainly purports to be based on poor policy settings by Australian governments in reaching traffic agreements with foreign airlines in general, and the ones from the Middle East and more lately China, in particular.
There has been no Australian campaign against even more generous policy settings in relation to open skies with America (where there are no capacity limits). The US market is one where Qantas has totally, and comprehensively beaten the US carriers, just as the Middle East carriers using a very similar deal, have also beaten the US carriers.
The ‘unfairness’ of the Qantas success in US markets comes from its investment in superior product and moving much of its lift to A380s, which on a per seat per distance basis, attract higher yields, which at the end of the financial reporting seasons, is the only thing that matters.
Just where the US brawl involving Emirates might lead is unclear. But if it leads to an American dismantling of open skies, the pain for Qantas, and Virgin Australia, and Air New Zealand, and the tourism industry, will be deep and harmful.
What works for Emirates on non-stop flights connecting over Dubai also works well for the likes of Qantas, Air NZ and, in so far as it participates, Virgin Australia, when flying non-stop across the Pacific or within the Asia-Pacific hemisphere.
There is a need to be careful about what ‘we’ wish for.