Emirates Airline is considering legal action against US carriers who have accused their rapidly growing Gulf-based rivals of unfair competition.
Sir Tim Clark, chief executive of Emirates, will meet transport officials in Washington on Monday to rebut the allegations from US airlines and unions that his airline has grown aggressively on the back of state subsidies.
“We will deal with [the allegations] line by line. They will be eating their words,” he told the Financial Times.
Delta Air Lines, American Airlines and United Airlines allege that Emirates, Etihad Airways and Qatar Airways, have benefited from $42bn in state subsidies over the past decade.
In the same period the Gulf carriers have grown from relatively small players to serious challengers on many routes, with Emirates now in the top three globally by capacity.
The US aviation industry has won the support of unions in an increasingly acrimonious battle to force a renegotiation of the Open Skies agreements with Gulf states, which allow national carriers greater access to each other’s markets.
Privately, US officials have said the campaign would not threaten the principle of Open Skies, which has helped to open up the global aviation market. But some in the industry fear US politicians could be susceptible to such lobbying in the run-up to the 2016 national election.
Willie Walsh, head of the UK-based International Airlines Group which is the parent of British Airways and Iberia, recently warned of “protectionism” that was “rearing its head again, notably in the US”.
Sir Tim said the allegations were also beginning to affect opportunities in other markets where legacy carriers were struggling to compete with Gulf carriers’ younger fleets, services and fares.
“There is an element of contagion in Europe,” he said. A German politician had recently called for a ban on granting landing rights to Gulf carriers “unless they answer the subsidies question,” Sir Tim said.
The boss of the United Arab Emirates-based airline added: “If we establish there has been commercial damage as a result of what has been said about us . . . all options are on the table,” including legal action.
At the Monday meeting with US officials, Sir Tim said he would ask that the airline “reasonably be given the chance to respond in the time that it takes us” before any action was taken. “I worry about knee-jerk reactions,” he said.
Although he was making a direct appeal to the transport secretary he stressed that governments, not carriers, would ultimately address any potential renegotiation of the Open Skies agreement. “These are government issues. That is where it lies in the first instance.”
However, revising the treaties that liberalised aviation markets would be “a huge error of judgment because there are so many things at stake,” he said.
Sir Tim said the US carriers had missed an opportunity to benefit from the expansion of Gulf airlines, which flew to many destinations not served by the US aviation industry. Emirates had tried several times to link up with American Airlines, for example.
“The smart thing to have done was actually to talk to us,” he said.
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