Emirates’ Sheikh Ahmed Challenges US Airlines To Reclaim Marketshare

The airline chief said that the US carriers underestimated the level of competition when they signed the open skies policy in 1999.



Emirates Chairman Sheikh Ahmed bin Saeed Al Maktoum has urged US airlines to improve their services in order to win back the market share lost to Gulf carriers in recent years.

Sheikh Ahmed’s statement follows a report prepared by American carriers, which showed that their combined share of bookings declined since 2008, losing out to other Gulf airlines over competitive rates.

However, the head of Emirates airline has dismissed such claims.

“Offer the best to the passengers and people will fly with you,” Sheikh Ahmed said in an interview with Bloomberg.

“They don’t mind paying maybe an extra penny to fly if your service is good, at the end of the day it is all about service.”

Sheikh Ahmed added that US carriers underestimated the competition when they signed an open skies agreement with the UAE in 1999.

According to a report submitted by major American airlines including Delta Airlines, United Airlines and American Airlines to the White House, the carriers saw a drop of more than five percentage points of their share of flight bookings from the US to the Indian subcontinent and South East Asia since 2008.

Meanwhile the bookings share of Emirates, Qatar Airways and Etihad have jumped 40 per cent in 2014, from just 12 per cent in 2008, the report showed.

The US airlines have also allegedly asked authorities to terminate the open skies policy, citing that Gulf airlines have received additional state support totaling $40 billion over the last few years. Such subsidies violate the conditions of the US trade policy, they claimed.

However, in comments carried by local daily Gulf News, Emirates airline president Tim Clark hit back saying that the US government should not be influenced by a “vocal minority.”

He also refuted claims that Emirates benefited from any kind of state support.

“We have never received financial subsides or bailouts,” Clark told Gulf News.

“We did receive start-up capital of $10 million in 1985 and a one-time infrastructure investment of $88 million for two Boeing 727 aircraft and a training building.

“This investment has been more than repaid by dividend payments to the government of Dubai, which total over $2.8 billion to date,” he said.

Flush with cash and favourable hub locations, Gulf carriers have expanded massively over the last few years.

The regional carriers have also constantly renewed their offerings with more luxury options and improved connectivity.

Comments

comments