In his parting speech as the head of global aviation body International Air Transport Association (IATA), Giovanni Bisignani called for a civilized resolution to the global airlines’ concerns about the rapid growth of Gulf airlines.
“Increasing tensions around the rapid growth of the Gulf carriers must be resolved,” Bisignani said yesterday in his State of the Industry Speech at IATA’s 67th Annual General Meeting in Singapore.
“The solution to call in governments as advocates, or as referees, has not worked. And it won’t,” Bisignani added, perhaps in a reference to Canadian Prime Minister’s previous comments defending its decision of not allowing Dubai’s Emirates airline and other Gulf airlines more landing rights in the country.
“As responsible leaders of this global industry, we must find a fair and reasonable way forward ourselves,” he urged. Some of Europe and North America’s airlines have recently intensified their efforts to lobby their governments against granting more landing slots granted to Gulf carriers.
Meanwhile, the battle of words over the growth of and competition from Gulf carriers continued during the CEO forum on the first day of IATA’s annual general meeting in Singapore, with the senior-most official of Air Canada’s parent company once again alleging that GCC airlines are protected by the state.
Robert Milton, chairman and chief executive of ACE Aviation, the parent company of Air Canada, kicked the burning debate off by saying that the UAE’s Emirates and Etihad airways, and Qatar’s Qatar Airways are “the most protected” carriers that cannot be allowed unfettered access to markets.
“They are arguing for free access, but aren’t we talking about the most protected, most government supported carriers around? There are none more state-owned than these three,” he said. “Alliances like Star, SkyTeam or Oneworld could be a viable alternative to them but the industry cannot just stand back,” he added.
Joining him, Austrian Airlines’ executive board member Peter Malanik said that the Gulf carriers had an unfair advantage due to government support and a close relationship with their airports and aviation authorities. He questioned if Dubai, for example, would allow a foreign airline to start up a subsidiary without disadvantages.
“We don’t have an issue with competition, but not competition that comes with a totally different set of rules,” he said.
Emirates President Tim Clark, on the other hand, responded by saying Dubai was an open economy. He said Emirates, which recently announced record profitability despite what was a not-so-good year for the aviation industry, was open about its books.
Clark dismissed accusations of government protection as a “cracked record,” challenging such accusers to “show me evidence of a non level-playing field.”
Following him, Qatar Airways chief executive Akbar Al Baker said the arguments against Gulf carriers made little sense in an “age of globalisation and free trade”.
Low labour costs advantages are a misnomer, he added, pointing out that Qatar’s pilots were earning as much, if not more, than their European or US counterparts.
“We are an efficient airline, run in a proper way with high utilisation,” he added, before training his guns on Malanik and saying: “If they allow us to establish to a subsidiary in Vienna, they can set up a subsidiary in Doha. We are happy provided there is reciprocity.”