© The Financial Times Ltd 2015 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
March 31, 2013 3:08 pm
European governments must not allow Emirates Airline and other Gulf carriers further access to markets until they demonstrate they are competing on a level playing field with their EU rivals, the head of Air France-KLM has urged.
Jean-Cyril Spinetta, chairman and chief executive of the Franco-Dutch airline group, told the Financial Times it would be “suicide” for European airlines if restrictions on Gulf carriers flying into European airports were removed, unless this is accompanied by assurances about fair competition.
Mr Spinetta – who is retiring from Air France-KLM in July – also insisted the lossmaking group would succeed with its turnround plan, saying it would then seek to participate in a phase of global consolidation in the airline industry that could involve US carriers.
Emirates, Etihad Airways and Qatar Airways – which are all state-controlled – are rapidly expanding their fleets and providing European airlines with stiff competition on long-haul routes, notably between Europe and Asia.
The three Gulf carriers have strongly denied receiving government subsidies, but Mr Spinetta said Emirates benefited from lower airport user fees at its Dubai hub compared to Air France in Paris.
He also claimed the Gulf carriers may be able to tap cheaper finance than their European rivals because they are state-controlled.
He insisted the Gulf carriers must clarify these issues, so that European governments could determine whether they are competing on a level playing field with EU airlines. Only then should the EU consider a so-called open skies agreement with the Gulf states that could allow their carriers unfettered access to European airports.
“If you compete with [Gulf carriers] in an open sky situation, it’s sort of suicide. It means European air will disappear.”
The European Commission, which last year proposed a comprehensive air transport agreement with the Gulf states, is holding talks with the United Arab Emirates and Qatar about “safeguarding fair competition”.
Mr Spinetta’s tough stance on the Gulf carriers is surprising because Air France-KLM – in which the French government has a 16 per cent stake – signed a partnership with Abu Dhabi-based Etihad last October, under which the two groups are establishing codeshares on certain routes.
Emirates said it would “continue to happily engage with the European Commission and others on all issues of competition and aviation subsidies given the importance we place on transparency and all airlines needing to be fully commercial”.
Meanwhile, Mr Spinetta said he saw a strong rationale for Air France-KLM combining with Alitalia, the Italian carrier that the Franco-Dutch group already has a 25 per cent stake in. However, he stressed no investment decisions on Alitalia are likely to be taken until 2014 or later.
Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.
Sign up for email briefings to stay up to date on topics you are interested in