UAE's national carrier Etihad Airways has called upon governments in the European Union and the region's airlines to embrace external investment to help strengthen the aviation sector.
Speaking in Vienna at a recent European Union conference on Air Transport Competitiveness in Europe, the Abu Dhabi airline's President and CEO James Hogan said his airline wanted to engage with Europe for mutual gain. “Consolidation of airlines is critical to sustainable air services,” remarked Hogan.
“External investment is not a threat. It is an opportunity to strengthen airlines, and to support employment and economic growth,” he added.
Etihad Airways has acquired minority stakes in three European airlines – airberlin (29.2%), Aer Lingus (4.99%) and Air Serbia (49%), and is finalizing the acquisition of a 33.3% stake in the Swiss regional carrier Darwin Airline, which operates as Etihad Regional.
Etihad Airways has also announced its intention to acquire a 49% stake in Italy’s Alitalia, subject to regulatory approval.
Hogan said Middle Eastern airlines were coming under increasing scrutiny in Europe, as opponents cited the expansion of Gulf carriers as a major competitive threat. “All Gulf carriers are not the same. We are different sizes, have different hubs and follow different strategies. We are actually vigorous competitors with each other,” he stated.
He pointed out that Etihad Airways, in particular, had become a major focus of larger competitors who feared and opposed its investment strategy. “Etihad is wholly-owned by the Government of Abu Dhabi. We received start-up capital, like every airline does, but we receive no state subsidies, no free fuel and no reduced airport charges in the UAE,” he observed.
Hogan said the European airline industry was built upon decades of government ownership and support, and that even after privatization or part-privatization, government bailouts, debt waivers and various forms of subsidies had continued.
He cited examples of state aid totaling 14.2 billion Euros, including an 800 million Euros payment by the German Government to Lufthansa to support a pension fund gap, state aid of 1.1 billion Euros for Swiss following the collapse of its predecessor, Swissair, and the Austrian Government’s absorption of 500 million Euros of debt accrued by Austrian Airlines. Both airlines are now subsidiaries of Lufthansa.
“Gulf carriers are not the cause of Europe’s aviation challenges,” stressed Hogan, adding that the industry was already facing serious problems decades before Etihad Airways was established in 2003.
He said the biggest problems facing the European industry were long-standing issues including congestion from under-investment in airports and airspace management, high operating costs at traditional hub airports, high labor costs and inconsistent and inequitable taxes levied on airlines and passengers.
“We understand and respect the fact that European airlines have their own business models, and we understand and work within the rules of Europe. We have a different business model to suit our different requirements,” he stated.
Source: TradeArabia News
