26 July 2009

Emirates Airline accuses Transport Canada

On 25 July 2009 the Toronto Star carried a report about the views Transport Canada has about Emirates Airline and the Emirates response which states that the department is making "slanderous" allegations. This story is being discussed in an aviation forum on Airliners.net. On 4 June 2009 the Financial Post reported Emirates CEO Tim Clark as saying the the Canadian government's approach was "ludicrous" and "protectionism of the worst kind." The Star carried an earlier report about lobbying by Emirates on 28 February 2009.

My read of the situation is that my Canadian counterparts are grappling with one of the more fundamental aeropolitical dilemmas of the last decade - how should governments (it is governments that exchange the air rights on a reciprocal basis) respond the spectacular rise of airlines from the Gulf region? They are not alone.

The home countries of the Gulf carriers are putting together an impressive number of air services arrangements that the carriers can utilise, taking advantage of their geographic location between Europe, Asia and Africa, to exploit the sixth freedom opportunities that as a consequence become available.

Many of these Gulf carriers seem intent on gaining global market share at the expense of profitability, although financial information is simply not disclosed by airlines such as Qatar Airways and Etihad. Not having to pay tax and enjoying some of the cheapest landing fees in the world at their home airports no doubt helps, as does the fact that reciprocal rights for other airlines to serve the Gulf region are often of limited value.

As a consequence the Gulf carriers and their home airports now play a much larger role in their respective economies than is typically the case of international airlines in other countries.

Emirates currently operates 28 wide-body flights into New Zealand every week (see previous post).

1 comment:

toronto realtor julie said...

Interesting. How comes that airlines like Qatar Airways don't have to pay tax?

Regards, Julie.