US business community’s backing for open skies clinches argument

Tim Clark promised a “line by line” riposte to American allegations that Emirates – and other Arabian Gulf airlines – breached open skies rules, but he actually went much better than that.

For every line of criticism from the “troika” of US legacy carriers – American, Delta and United – in their “white paper” in January, Mr Clark managed to produce about eight lines of robust rebuttal in Washington.

The white paper was 50 pages long. Emirates’ response, unveiled at the National Press Club in the American capital, was about 400 pages. Of course, this is not just a contest to show who has the biggest. It will in the end be a question of which side has produced the better-argued case, backed by cold, hard fact, to persuade the target constituencies here: the US departments of commerce, transport and state, and the Obama administration in general, as the ultimate arbiter of open skies rules.


On a necessarily brief early scan of the document, the Washington tome looks the weightiest in this respect. Whereas a lot of the legacy carriers’ white paper was hearsay, media speculation or derived from unnamed sources “familiar with the matter”, Emirates has produced a well-researched, painstakingly attributed and persuasive argument for why the status quo in US and global open skies should not be changed.

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■ Emirates rebuttal

To view the document, click here.

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The basic bones of the Emirates argument is this: the airline’s commercial and financial success over the past 30 years has come about as a result of visionary strategic planning by Dubai’s leaders, coupled with the blessing of geographical location and a revolutionary business model based on long-haul hub-to-hub service.

The government of Dubai invested about $218 million over the years to promote Emirates, in the form of a $10m chunk of seed capital followed by various grants of land and property for growth. That sum is meagre set against the $3.36 billion the airline has given back to its owner, Investment Corporation of Dubai.

On its own, that fact virtually demolishes the troika’s arguments. Far from being subsidised by the Dubai government, Emirates has in fact been subsidising the government all along, as the financial details prove.

It can be safely left to the lawyers to decide whether or not Emirates has transgressed some part of World Trade Organization rules, but in the end that does not really matter.

As the Washington report argues, the whole purpose of open skies was to enhance competition, increase the number of flights and airports served, and give the passenger, especially the business passenger, more choice and better service.

All Emirates’ evidence should persuade anybody that the extension of the open skies regime has had a significant beneficial effect, not least on the American airlines doing the complaining, and its removal would seriously affect global aviation.

Finally, it is important to remember that this dispute is not a UAE v US affair, although that is how some – particularly the Delta Air Lines chief executive Richard Anderson – have chosen to paint it.

In the Washington report’s voluminous appendices there is one that stands out as the argument clincher. “Exhibit 7 – Supporters of Open Skies” is a comprehensive catalogue of the A list of US business: chief executives of companies in the aviation, leisure, hotels and tourism sectors; leaders of logistics and distribution companies; congressional and mayoral politicians, all of whom support the Arabian Gulf carriers rather than the protectionism of the legacy carriers.

As the man said, at the end of the day the business of America is business. The US business community seems to have spoken conclusively in support of open skies.

fkane@thenational.ae

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