Etihad CEO dismisses 'unfair' subsidies claims

17 Mar 2015 by GrahamSmith

Etihad Airways CEO James Hogan has hit out at criticism from US carriers that Gulf airlines receive unfair government subsidies.

The Australian chief executive praised the open skies agreements around the world as a "model of success" and described it as "ultimately all about consumer choice".

His comments come after Delta, American and United jointly complained that Etihad, Emirates and Qatar Airways have received $42 billion in subsidies from their governments since 2004. They claim this makes a level playing field impossible.

But Hogan said that Etihad being a national airline owned by its government makes it no different to many carriers around the world.

He said: "As one of the newest national airlines anywhere in the world, we've had to create everything from scratch — every bit of product, every bit of our operations, every bit of our infrastructure.

"Etihad is a David, a David who's been facing Goliaths since 2003, when we started. In virtually every market we've entered, we've had to face existing competitors, with established businesses, established infrastructure, established sales and marketing, established brands, and established customer bases.

"In many cases, those established airlines were gifted amazing infrastructure — airports, terminals, slots, landing rights — over decades. To take them on, we've had to work harder and we've had to work smarter. That's called competition.

"We've been helped by our geographic position. The Gulf is at the centre of today's trade and travel routes. Today's aircraft technology and the changing patterns of world trade mean we are positioned strongly for many new and emerging markets.

"We've been helped by our blank sheet of paper — no legacy systems, no legacy aircraft, no legacy mindsets. And we've been pushed hard by the vision and ambition of our shareholder to create a globally competitive airline."

Hogan said he regards Etihad as a "friend of the United States" and cited the airline rostering a B787-9 Dreamliner, an American-built aircraft, onto its daily service to Washington, DC two days ago (see news, March 12).

He said: "Certainly, the bonds between the UAE and the US are incredibly strong, and we believe Etihad Airways has always reflected that in our business operations.

"We are major customers of Boeing, of GE, of Sabre, and of many other American businesses. We work with strategic American partners... we work with US financial institutions, with US tourist boards, with US airports. Our commitment to the US economy supports more than 200,000 jobs."

Graham Smith

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