Qantas, the Australian flag carrier, and Dubai-based Emirates, one of the world’s fastest growing long-haul airlines, have launched fierce attacks on each other over the Middle East airline’s efforts to expand its presence in the Australian market.
Behind the row lie growing concerns both in Australia and Europe about the competitive threat posed by the rapid expansion of a number of state-owned carriers in the Middle East, most notably Emirates, Qatar Airways and Etihad, the Abu Dhabi-based airline, which have placed some of the biggest ever orders for long-haul aircraft with Airbus and Boeing.
Emirates has made an application to the Australian authorities to double the number of its services between Dubai and Australia, a move Qantas is fiercely opposing.
The Australian carrier is also resisting efforts by Singapore Airlines to break into its lucrative market between Australia and the US, most importantly the route between Sydney and Los Angeles, which is one of the most profitable parts of the Qantas network.
Margaret Jackson, chairman of Qantas, launched the latest war of words last week by saying that “to suggest that Emirates is competing on similar terms as commercially-run airlines like Qantas is, quite frankly, fiction.”
She said that Emirates was 100 per cent owned by the government of Dubai and that government ownership provided a sovereign risk rating that allowed the airline to carry debt levels far higher than could be sustained by publicly listed carriers such as Qantas.
Emirates paid no corporation tax in Dubai, she said, and its chairman Sheikh Ahmed bin Saeed A-Maktoum, was a member of the ruling family and head of the Dubai department of civil aviation, which also ran Dubai airport.
“Life must be wonderfully simple, when the airline, government and airport interests are all controlled and run by the same people,” she said.
Emirates’ “remarkable growth” reflected “the aggressive and co-ordinated strategies” of the government of Dubai to build a world class hub to grow tourism and business, she said.
The Dubai carrier’s request for rights to fly 84 services a week between Australia and Dubai, double the number currently operated, was “not only extravagant, but flies in the face of fair competition,” said Ms Jackson.
Qantas’s concern is that Emirates will draw increasing volumes of traffic out of Australia to feed through its Dubai hub into its expanding network into Europe.
In Europe Air France in particular has voiced similar fears about the impact of Emirates’ expansion on its traffic flows.
Maurice Flanagan, vice chairman and group president of Emirates, has rebuffed the latest Qantas attack and claimed on Tuesday that the Australian carrier was “one of the world’s most anti-competitive airlines and customers are paying higher prices as a result.”
He said that Emirates was not subsidised and operated as a “fully open, audited and commercial international business.”
“Lately Qantas has tried to stop, at all costs, competition on one of the world’s most protected routes - Australia to the US - and now they want to stop further competition on arguably Australia’s most important routes to greater Europe, the Middle East and Africa.”
Mr Flanagan said that Qantas’ calls for protection “belong in another era. Qantas needs to accept that government protection is the most powerful subsidy of them all. In contrast Emirates receives no subsidies nor any aero political protection.”
He said that Emirates was growing the Australian market via routes beyond Qantas’s “very narrow” international services. Emirates flew to at least 12 European destinations ignored by Qantas including Milan, Moscow, Paris, Rome and Manchester.
Emirates said that Qantas, one of the world’s most profitable airlines, had “to do more than promote myths or distortions about competitors and instead answer the fundamental question of how they justify their anti-competitive stance.”
Get alerts on Transport when a new story is published