Canada and Emirates Airline rift grows

A government agency says the airline should be blocked from further access into the country due to unfair state support.

Emirates planes outside Terminal 3 in Dubai International Airport.

Emirates Airline has hit back at Canadian officials and called their language "aggressive, often biased and deeply offensive", after a transport agency said the airline should be blocked from further access into the country because of unfair government support. The rebuke from Andrew Parker, the airline's top governmental affairs executive, was in response to a presentation by Transport Canada, the country's leading agency governing air travel. Transport Canada called Emirates and Etihad Airways "instruments of government policy". "The governments are helping finance massive wide-body aircraft orders and massive expansion of airport infrastructure," it said during the presentation at a private briefing to stakeholders. A copy of the presentation was obtained by the Toronto Star. The spat follows a campaign of nearly two years by Emirates to expand beyond its current allotment of three flights a week to the country of 32 million residents. It wants to service 21 flights a week through daily trips between Dubai and Toronto, Vancouver and Calgary. However, its efforts have so far have been blocked by the Canadian government to protect the country's ailing flag carrier, Air Canada, which depends on lucrative international traffic to India and elsewhere after facing stiff competition from a domestic rival, Jetstar. With new aircraft, government owners and the full support of the UAE's civil aviation authorities, Emirates and Etihad Airways have been dogged by claims of unfair support from rivals since the airlines were launched. The claims often revolve around subsidised fuel, low airport landing fees and financial assistance for aircraft purchases, although they have never been verified. Emirates and Etihad say the statements reveal fundamental misperceptions about the carriers. They say the airlines have raised billions of dollars from institutions, not their government backers, to finance their purchases. "Emirates does not receive any subsidies, guarantees, or any other financial support from the Government of Dubai," said Gary Chapman, the president of Emirates Group Services and Dnata. "To fund our aircraft purchases, Emirates has a robust and diversified financing strategy which utilises various instruments including bonds, financial and operating leases, Islamic structures and export credit-supported structures." An Etihad spokesman said yesterday the company had arranged loans from 25 institutions in Asia, Europe, the US and the Middle East. "Etihad Airways operates on a level commercial playing field and receive no subsidies, sovereign guarantees or fuel discounts. We have a genuine commercial mandate," he said. Emirates Airline's efforts in Canada gathered momentum in March last year when it enlisted the services of a local lobbying firm, Temple Scott Associates. Over a 16-month period, nine executives from the firm wrote letters and communicated with Canadian government officials to lobby on behalf of Emirates, according to documents provided by the Office of the Commissioner of Lobbying in Canada. The agencies included Foreign Affairs and International Trade Canada, Industry Canada, Transport Canada, the Canadian Tourism Commission and the Senate of Canada. The documents also show that Tim Clark, the president of Emirates, personally contacted members of the Canadian government on six occasions. [e-mail]