Emirates chief hits back against trade war accusations

Accusations by rival airlines in Europe that Middle Eastern companies have an unfair advantage due to special financing rules are "nonsense".

Tim Clark, the chief executive of Emirates Airline, last night struck back at European rivals who launched a trade war against Gulf carriers claiming the region's airlines have expanded through global subsidy.

"To suggest that we get 100 per cent support and the soft loans that come with that - according to them - is giving us a competitive advantage is nonsense but then most of those accusations are," Mr Clark said.

European airlines are this week expected to lobby for a change of financing rules that allow foreign airlines to receive credits when buying Airbus and Boeing planes. Such credits are not offered to airlines in the US, where Boeings are made, or in Germany, Spain, France and the UK, where Airbus jets are assembled. Emirates finances only 20 per cent of aircraft purchases through export credits, he said.

Pierre-Henri Gourgeon, the Air France-KLM chief executive, said on Monday that European governments should curb the expansion of Gulf Arab carriers to protect European airlines from what he described as unfair competitive advantage. Export credit agencies have stepped up their assistance to foreign airlines during the economic downturn. Last year, Ex-Im Bank arranged US$2.3billion (Dh8.4bn) worth of deals to Middle East airlines, a 200 per cent increase from 2006, officials have said. Emirates is the world's largest purchaser of wide-bodied aircraft and will require more than $28bn in financing through to 2017.

Facing the threat from Gulf airlines, carriers in the US and Europe are challenging rules that have smoothed the sales of jetliners to Asia and the Gulf. Mr Clark said it was natural for Emirates to take advantage of export credit if it is provided, and it was up to the governments if they chose to support their industries.

"People who make statements need to check the facts, the veracity of what they are saying, to ensure they don't make themselves look silly," Mr Clark said.

"If they spend as much time running their business as they do trying to run us down they might make even more money."

The row was sparked by a public diplomatic spat over landing slots at Canadian airports. In a signal of how heated the spat has become, Canadian officials yesterday said they were prepared to move troops out of the UAE, accusing the Emirates of evicting them from a base in Dubai.

A UAE official, speaking to Reuters on Sunday, said a memorandum of understanding between the two countries governing the base had expired.

* With Reuters