Etihad Airways chief defends open skies policy
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Etihad Airways president and CEO James Hogan has warned against any review of the airline industry’s open skies policy, following claims by US’ major carriers that their Gulf rivals receive government subsidies that have fuelled their rapid growth.
Open Skies has been “a model of success, generating enormous benefits for travellers and for airlines in the US, the UAE and around the world,” said Hogan, speaking at this week’s US Chamber of Commerce Foundation’s 14th Annual Aviation Summit in Washington, D.C.
In his first public comments since three US airlines launched a campaign against Etihad Airways and other Gulf carriers, Hogan called for reasoned debate based upon facts. He also warned against action, which would restrict competitive choice for millions of US and international air travellers in markets which the US airlines have chosen not to serve.
“As one of the newest national airlines anywhere in the world, we’ve had to create everything from scratch: every bit of product, every bit of our operations, every bit of our infrastructure,” he said.
“Etihad is a David, a David who’s been facing Goliaths since 2003, when we started. In virtually every market we’ve entered, we’ve had to face existing competitors, with established businesses, established infrastructure, established sales and marketing, established brands, and established customer bases.
“In many cases, those established airlines were gifted amazing infrastructure – airports, terminals, slots, landing rights – over decades.
“To take them on, we’ve had to work harder and we’ve had to work smarter. That’s called competition.
“We’ve been helped by our geographic position. The Gulf is at the centre of today’s trade and travel routes. Today’s aircraft technology and the changing patterns of world trade mean we are positioned strongly for many new and emerging markets.
“We’ve been helped by our blank sheet of paper – no legacy systems, no legacy aircraft, no legacy mindsets.
“And we’ve been pushed hard by the vision and ambition of our shareholder to create a globally competitive airline.”
As a national airline owned by its government, Hogan claimed Etihad Airways is no different than scores of airlines around the world. The airline has always made clear it has received equity investment and shareholder loans, which have been supplemented by US$ 10.5 billion in loans from international financial institutions.
“Our shareholder believes in our business plan,” he said. “They have increased their commitment as we have developed – they have invested in our success.
“They’ve seen the success we are delivering, both as a business in our own right and as a catalyst for other business, trade and tourism, in Abu Dhabi and the UAE. We are now not just an airline but a successful aviation group, incorporating handling, maintenance and distribution capabilities.
“Our shareholder, like any rational shareholder in the world, has made that commitment to us because it expects a return, and as it sees greater success from our business, it sees the opportunity for even greater returns in the future.
“The key word is return.”
Hogan finished his speech by saying Open Skies is about customer choice.
“This is ultimately all about consumer choice. Customers choose to fly Etihad Airways because we offer a great product, with outstanding service, on the routes they want to fly, at prices that are competitive within those markets.
“They choose us against many different competitors, depending upon which market we are in. But quite honestly, it is very rare that US carriers offer those alternatives. No US carrier flies into Abu Dhabi. There are very few US carriers operating to where we do in the Indian sub-continent, in south-east Asia, or in the wider Middle East.
“We make no apologies for offering new competitive choice for air travellers. We hope to continue to do so around the world.”
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