EU and Gulf countries make headway in aviation talks

European carriers have claimed that the Gulf airlines’ expansion in Europe is unfair because of the alleged subsidies they receive from their governments.

London-based consultancy Frontier Economics estimated that Emirates, through its operations and aircraft purchases, supports 126,000 jobs across Europe. Alexander Hassenstein / Getty Images

LEIPZIG, GERMANY // European and Arabian Gulf countries have made progress on aviation talks that will address the competition issue of Gulf carriers who are locked in a row with western competitors over alleged subsidies, the EU’s transport commissioner said yesterday.

European carriers say that their Gulf rivals' expansion in Europe is unfair, alleging that they receive government subsidies. Qatar Airways, Etihad Airways and Emirates have all denied such claims. European governments, including in Germany and France, have also complained as their airlines lose market share.

"We had a very successful meeting with the Gulf countries a couple of days ago in Doha and progress has been made," Violeta Bulc told The National at a transport conference. "The talks were very friendly and much more encouraging than the previous one."

Germany and France have asked the European Commission to take up bilateral negotiations with Gulf countries on any future aviation agreements rather than allowing individual European states to sign deals, Alexander Dobrindt, Germany’s minister of transport and digital infrastructure, said on Wednesday.

Air France-KLM and Germany's Lufthansa in December wrote a letter to Ms Bulc regarding alleged government aid to Emirates, Etihad and Qatar Airways.

Ms Bulc, an entrepreneur and politician from Slovenia, said the European Union was working on a package of aviation measures with the Gulf. “At the same time we hope to proceed with bilateral discussions with the major carriers in the Gulf, and right now we are putting together an aviation strategy and aviation bilateral agreements will be part of that strategy,” she said.

“We are submitting [them] to the [European] commission in the fall and as soon as it gets approved then we will proceed with all the actions. We hope negotiations will start this year, but it all depends on how successful we are going to be.”

Michael Cramer, the chairman of the transport and tourism committee in the European Parliament, called for fair competition in the continent.

“We have to look at fair competition,” he said.

“Of course we need flights but not for every distance and as much as possible, we need as much as necessary.”

For Europe, the hub and spoke approach espoused by Gulf airlines may not work for several reasons such as environmental and societal concerns over flights. Also the European airports may not be profitable enough to become hubs.

“More than 60 per cent of the flights in Europe are within Europe and it can be a problem for some hubs because some are winning and some are losing,” said Mr Cromer.

Emirates in March said that it contributed more than €10 billion (Dh40bn) to the European economy, citing a study by the London-based consultancy Frontier Economics, commissioned by the airline. The study estimated that the Dubai carrier, through its operations and aircraft purchases, supports 126,000 jobs across Europe.

Frontier estimated that Emirates’ operations, meanwhile, supported 85,100 jobs across the European Union in 2013 and 2014. Frontier estimated that the airline’s Airbus A380 deliveries for the same period supported 41,000 jobs, equivalent to €3.4bn of GDP.

Likewise, the Etihad chief executive, James Hogan, said his airline's core operations in the EU contributed $1bn to the combined GDP of the 28 EU nations last year and supported more than 11,000 jobs there.

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