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Are Gulf carriers getting too big for their boots?

Are Gulf carriers getting too big for their boots?

Canada denies the UAE valuable landing slots while European carriers seek restrictions. It should be fine, as long as everyone acts in a mature fashion. Unfortunately, this is the Middle East.

October 11, 2010 2:30 by

Plenty of news in the air industry this week, as GCC carriers seem to be falling out with just about everybody. The latest news is that European airlines are ganging together to ask the European Union to contain the expansion of Gulf carriers in the region. The European companies think that airlines like Etihad and Emirates pose a major threat to their market share.

Air France Chief Executive Officer Pierre-Henri Gourgeon said, “Europe is at the crossroads of international air travel, and this is a role we need to value and defend. What we’re telling the authorities is that we need a strategy that gives us a chance to resist.”

According to Emirates 24-7, top European airline chiefs will also meet to ask for changes that will make it easier for their companies to get credit. At present they cannot get plane financing deals that are anywhere near as competitive as the government-backed deals seen in the Gulf.

“Our ability to fund the acquisition of new aircraft is handicapped by the so-called ‘home-country’ rule,” BA spokesman Paul Marston was quoted as saying by Bloomberg. “These guarantees are not operating in the way they were intended — and we therefore urge the EU to amend the rules to remove the competitive distortions that have developed.”

Gourgeon says that a company like Emirates pays very little in the way of airport charges in or fuel tax, and avoids the “social charges” faced by European companies. “When you’re supported in this way you can offer the end product at very low prices,” he said. “They don’t pay tax — they don’t even have a word for it.” [Yes, we do Pierre, we call it “tax.”]

Meanwhile, clearly eager to get itself into a showdown before Europe makes its move, the UAE has managed to pick a fight with Canada. Talks between the two countries have been going on for years to try to secure more landing slots for UAE airlines Emirates and Etihad, but they finally broke down this week when Canada turned down the request. The UAE carriers were seeking dozens of new slots on the basis that the six weekly flights currently permitted are not enough to meet demand. But Transport Canada, the government agency that oversees the airline industry, is worried such a move would damage Air Canada, according to Bloomberg.

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  1. Miss Anne Thropic on October 14, 2010 8:37 am

    Airlines such as Air Canada cannot possibly compete with Emirates and Etihad who get massive support from the government. At the end of the day, it’s Canada’s airport so it’s their call as to who lands there. The UAE, with its own “it’s our country, we can do as we please” attitude just doesn’t like it when the shoe is on the other foot.

    Also, kudos to Kipp for being the first UAE media outlet to mention the military base issue in this story.

  2. Mr. Sal on October 14, 2010 11:31 am

    Air Canada (with Canadian French speaking) and Air France are trying to monopoly the air travel between Europe and Canada.

    Emirates air line does not get a massive support from the government.

    Emirates air line provide many jobs for the people that operate on.

    i think the solution for U.A.E is:

    To buy the lobbies groups in Canada specially the french speaking people “you can find many with north African Arab background”.

    make a campaign inside Canada to show the benefits of opening the air to Emirates.

    counter attack all the lies and cheap fallacy against Emirates air lines in the Canadian media.

  3. Andrew on October 14, 2010 3:00 pm

    Mr. Sal. Go and buy a box of rocks so you’ll have something of a similar intellectual capability to converse with. If you think Emirates and Etihad don’t reap the benefits of partial or complete government ownership, no taxation, and cheap regional labour costs – you’re deluding yourself.

    The Emirates increasingly reminds me of the Virgin Group and Richard Branson; constantly trumpeting free trade and competition – but generating most of its revenues from business units that are in limited competition or outright monopoly situations.

    If Canada wants to trade Camp Mirage for the issue of landing rights that’s their right, especially given the incredibly petty reaction of the UAE to deny landing rights for Canada’s armed forces minister and chief of staff to land at their own base.

  4. Miss Anne Thropic on October 16, 2010 8:46 am

    I am baffled at Mr Sal’s idea to raise up a French-speaking lobby group of north African-Arab background to take on the Canadian government. What a great plan. Does he really think a small minority group who is probably delighted to be enjoying Canada’s freedoms will gleefully rise up against a country with which they owe no loyalty? And even they did rise up, what would it achieve apart from a racist reaction from any Canadian Islamophobes out there?


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