A major American airline CEO embroiled in a heated dispute against three Gulf airlines has blamed 9/11 terrorists “from the Arabian Peninsula” for his company’s bankruptcy bailout in 2005.
Delta Airlines’ Richard Anderson is one of three US carriers that claim they have evidence Dubai’s UAE-based Emirates Airline and Etihad Airways and Qatar Airways have received a total of more than $40 billion in government subsidies that breach the Gulf states’ open skies agreements with the US.
Denying the cash hand outs, Emirates CEO Tim Clark said Delta and United Airlines’ had benefited from US bankruptcy laws that allowed them to forgo debt and cut operating costs to continue flying in what amounted to “arguably the biggest subsidy of all”.
Speaking on CNN on Monday, Anderson inferred the Gulf states were responsible for those bankruptcies.
“It’s a great irony to have the UAE from the Arabian Peninsula talk about that given the fact that our industry was really shocked by the terrorism of 9/11, which came from terrorists from the Arabian Peninsula, which caused us to go through a massive restructuring,” he said.
Numerous airlines globally were forced to undertake unprecedented restructuring programs in the mid-2000s, including retrenching thousands of staff and cutting services when flight bookings plummeted following the New York City attacks in 2001.
Two of the 19 9/11 hijackers were from the UAE, while 15 were from Saudi Arabia and the others were from Egypt and Lebanon.
Anderson said although the restructured airlines had been allowed to forgo billions of dollars in debt, it was “categorically false” that they had received bailouts.
“And in the US our restructuring process is transparent and there is no government subsidy, and in fact there were billions of dollars of equity and unsecured debt that were wiped out through that process,” he said.
Anderson claimed Emirates, Etihad and Qatar Airways were “not airlines, they are governments”.
Delta, United and American Airlines have collaborated to call on the US government to review the open skies agreement with the Gulf airlines.
“[We want] our government to go in and request negotiations and negotiate a way to level the playing field to set off against $40 billion in subsides, most of which is just direct subsidies,” Anderson said.
“We have spent two years analysing their financials and we have found evidence of their actual financial statements from other places in the world that provide documented evidence that can’t be refuted of tens of billions of dollars of direct government subsidies.
“The Middle East carriers, the UAE and Qatar cannot deny huge government subsidies. They’re a violation of the WTO [World Trade Organization] definition of subsidy and they’re a violation of US open skies agreements.
“So let’s not be detracted by the huffing arguments that the UAE make.”
In a rare public rebuke of criticism of Emirates, Clark said in a statement last week that the complaining airlines’ call for political protection “makes absolutely no sense” and made a mockery of the country’s liberalist stance.
“As far as the airline industry is concerned, aero-political protection for airlines is arguably the biggest subsidy of all,” Clark said in a statement sent to Arabian Business.
“Therefore, it would be ironic, and a shame, if the US, who have been the forerunners of liberalisation and deregulation, would now contemplate a U-turn on its successful international aviation policies for the benefit of a narrow few, based on sweeping and unfounded subsidy allegations.”
The Gulf carriers have rapidly expanded globally but service a maximum of nine US cities and Clark said there was “virtually no” overlap with flights offered by the complaining US airlines.
Those services also allowed passengers one-stop connectivity to 60 other cities in the Middle East, Africa and Asia Pacific – destinations he said were not currently served by American carriers, except perhaps via their alliance partners “where routings are often relatively convoluted or inconvenient”, Clark said.
Meanwhile the Gulf carriers provided billions of dollars annually to the US economy by providing consumer and business connections.
