The Emirates airline president Tim Clark has reacted strongly to an intervention in the increasingly bitter “open skies” row by the mayor of Chicago, Rahm Emanuel.
Earlier this month Mr Emanuel, who runs the city to which Emirates has been flying since August, wrote to the American secretary of state John Kerry and two other leading members of the Obama administration, expressing his "serious concerns" about allegations of unfair government subsidies received by Arabian Gulf airlines.
Mr Emanuel said that continued growth by the Gulf carriers would “harm the US aviation industry, leading to service reductions in important hub markets like Chicago and a loss of good American jobs”.
In a strongly worded reply, Mr Clark said he was “both surprised and more than a little disappointed” by the mayor’s letter. He said Mr Emanuel’s endorsement of the allegations was “hard to square with America’s long-standing commitment to fairness and due process”.
_______________
Open skies row letters
■ Read Chicago mayor Rahm Emanuel's letter here
■ Read Emirates airline president Tim Clark's letter here
_______________
Three US airlines – American, Delta and United – have alleged that Emirates, Etihad Airways and Qatar Airways have received US$42 billion in subsidies in violation of “open skies” agreements between their respective governments.
All three Gulf airlines fly to Chicago’s O’Hare International Airport, the third biggest in the US and a significant hub for both American and United.
“I strongly believe that every airline flying into O’Hare must abide by the same set of rules, but that’s not what is happening,” Mr Emanuel, who was re-elected as mayor last month, wrote.
Mr Clark replied: “The city of Chicago and Emirates are partners in the success of your city’s only non-stop air service trade link with Dubai. We were first approached by Chicago in 2010 and lobbied more than a dozen times thereafter, not only by O’Hare itself but also by the Chicago department of civil aviation. Considering we have carried more than 115,000 passengers to your city in less than a year, our partnership seems to be exceeding expectations.
“As our partner, however, I would have hoped that in case of concerns about allegations against Emirates, you might have reached out directly in case of concerns and given us a fair opportunity to respond.”
He added: “Let me be clear about this. As far as Emirates is concerned, the allegations of subsidy are demonstrably false. We intend to submit a robust, fact-based, point-by-point rebuttal for the US government.”
Mr Emanuel wrote that “the three major US airlines employ more than 25,000 people in the Chicago area, while the Gulf carriers employ less than 50. Standing by American airlines means standing by hard-working Americans”.
Mr Clark replied: “According to Chicago department of aviation, Emirates’ Chicago-Dubai non-stop flight alone accounts for $200 million in annual economic benefits for the Chicago area, a sum that surely supports more than 50 local jobs.”
Mr Clark also highlighted Emirates’ purchase of aircraft made by Boeing, which has its international headquarters in Chicago.
"In November 2013 we placed the single largest aircraft order in the history of US commercial aviation for 150 new generation Boeing 777X aircraft – valued at $76bn at list prices – with options for 50 more. This order will support over 400,000 US jobs. We are very confident that more than 50 of these jobs will be in Chicago."
Finally, Mr Clark said that any government freeze of Emirates’ expansion plans in America–a freeze for which Mr Emanuel had called – would be a “major breach” of the open skies agreements. “Any freeze would – if implemented – prevent Emirates from expanding in-bound tourist capacity to O’Hare as market conditions warrant, including potential flights with our Airbus A380s.”
In a separate development, a study by the business consultancy Oxford Economics published yesterday said that Etihad would contribute $2.9bn to the US economy and support 23,400 American jobs this year.
The study, commissioned by Etihad, forecasts that within five years Etihad expenditure and investment would support more than 46,000 jobs and deliver more than $6.2bn annually in the US.
fkane@thenational.ae
Follow The National's Business section on Twitter
