Etihad Airways has denied accusations from a United States lobby group that it received US$2.6 billion in state subsidies last year as the spat between Arabian Gulf carriers and their US rivals over government subsidies intensifies.
The Abu Dhabi-based carrier’s alleged subsidies last year were a single-year record, said the Partnership for Open and Fair Skies on Tuesday.
The partnership is led by the three biggest US carriers – American Airlines, Delta Air Lines and United Airlines – and several unions.
The group said the figures disclosed were garnered from Etihad’s non-public financial statements obtained in Hong Kong.
“We have never made any secret of the fact that we have received equity capital and loans from our shareholder,” said an Etihad spokesperson. “That is completely normal for any business which has significant long-term capital commitments, for example for aircraft deposits. Etihad Airways’s accounts are audited by KPMG and are fully compliant with international financial reporting standards.”
Etihad’s profit last year soared 52 per cent to $73 million, thanks to passenger and cargo growth, as revenue rose 26.7 per cent to $7.6bn.
Since January, the US carriers have been locked in a spat with Qatar Airways, Etihad and Emirates Airways over accusations of unfair competition, an issue that threatens the open-skies policy between Arabian Gulf countries and the US.
“Etihad’s own financials prove that it is not a commercially viable enterprise and owes its continued existence to massive government subsidies from the United Arab Emirates,” said the partnership.
The US airlines allege that Emirates, Etihad and Qatar Airways have received $42bn in government subsidies over the past decade that have helped them to compete unfairly, putting them in breach of open-skies agreements. They have urged the Obama administration to review these deals and block their rivals from receiving any additional capacity.
The Arabian Gulf airlines refute the allegations, saying that their US rivals are acting to protect their own market share. Etihad has hit back at its US rivals with a report saying that North America’s big three carriers netted more than $70bn in government and court-sanctioned benefits over the past 15 years.
“These issues have all been addressed in our submission to the US government under the Open Skies docket,” said Etihad.
In April, the US departments of state, commerce and transportation set up a docket on regulations.gov, providing an open forum to receive feedback from stakeholders before any decision is made over the US airlines’ claims. The docket was closed this month.
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