Etihad: U.S. Carrier's Claims are "Fundamentally Flawed, False and Arrogant"

While the Dutch government has added a sorry chapter to its blatant protectionist policy by halting further increases of services to Amsterdam Schiphol Airport by the three Middle East carriers, Emirates, Qatar Airways and Etihad Airways, the latter has published yet another report on the attempts by the three largest U.S. carriers, United, Delta and American to revoke Open Skies agreements between the U.S. and the UAE and Qatar.

Etihad deploys heavy artillery against its U.S. competitors
Etihad deploys heavy artillery against its U.S. competitors

An earlier report by The Risk Advisory Group, countered the U.S. carriers’ claim that the three Gulf carriers received US$42 billion of subsidies from their state owners, which allegedly contravened the terms of the Open Skies agreements between the U.S., the UAE and Qatar.

Edgeworth speaks of “simplistic claims” presented by U.S. airlines
In the first report released in early-May, Etihad claimed that the three U.S. carriers received some US$71.5 billion in financial benefits over the past 15 years, mainly by being able to wipe out debt through Chapter 11 bankruptcy restructuring.
Now, the new Etihad-commissioned Edgeworth report identifies “fundamental flaws” and “ignores key evidence” in the Compass Lexecon Report recently released by the three U.S. carriers. The report also dismisses what it says are “simplistic claims” in the report by Compass Lexecon.

Stiff competition leads to pax growth, asserts EY
In a statement Etihad Airways says: "Despite claims by the Big Three U.S. airlines, the market for air travel from the U.S. to the Indian sub-continent has expanded significantly from 2009 to 2014, with U.S. airlines and their European partners actually flying 223,000 more passengers during that period.
The research, undertaken by U.S.-based consultancy, Edgeworth Economics, found that on routes where Etihad Airways competes with the three largest U.S. carriers and their global alliance partners, these airlines actually carried more passengers, despite having lost market share on certain routes.

No harm done to U.S. carriers by their Gulf rivals, Etihad
The Edgeworth report also assails two unsupported assumptions in the Compass Lexecon Report: it treats as an accepted fact that the three Gulf carriers have received subsidies; and it assumes the three U.S. carriers “own” traffic on existing routes and the Gulf carriers are only entitled to compete for traffic if they can prove they have stimulated this traffic.
Etihad said that: “The Compass Lexecon Report fails to establish any actual harm caused by the Gulf carriers to U.S. carriers, whereas the Edgeworth Report demonstrates that competition has led to overall market growth and increased consumer choice,” Etihad said.

Meeting May deadline for responding to U.S. allegations
“The claims made by the three U.S. carriers that Etihad and other Gulf carriers are damaging their business and taking ’their’ passengers, are not only false, but also arrogant. They do not ‘own’ these passengers, nor do they do have a right to them,” Etihad chief strategy and planning officer, Kevin Knight was quoted as saying.
Etihad Airways has confirmed that it will file its full response with the U.S. government by the end of May, the deadline for comments to the departments of Commerce, State and Transportation which are conducting a review of the subsidy allegations.

Nol van Fenema

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