It’s time for Europe to stand up for fair competition.
Europeans for Fair Competition is a coalition composed of Europ eans- airline employees, passengers, companies, and many others who are fighting to save European aviation jobs. Good jobs matter! The goal of the coalition is to establish a level playing field with countries that excessively subsidize their airlines in violation of European air service agreements, notably the United Arab Emirates and the State of Qatar. These Middle East nations have collectively injected over €39 billion in government subsidies and unfair benefits into their state-owned airlines.
in unquantified subsides of purchases of goods and services from other companies owned by the government of the United Arab Emirates
in government assumption of fuel hedging losses
in subsidized airport infrastructure at Dubai International Airport
in government “loans” with no repayment obligation
in capital injections by the United Arab Emirates
additional undisclosed government funding in 2014
in government grants
in airport fee exemptions at Abu Dhabi International Airport
in “loans” and “shareholder advances” by the State of Qatar with no obligation for repayment
in government loan guarantees
in airport fee exemptions and rebates at Doha International Airport
in free land
A global investigation.
During a two-year investigation into the finances of Emirates, Etihad, and Qatar Airways, researchers obtained financial statements and other records showing that over the past decade these three state-owned airlines collectively received €39 billion in unfair benefits from their governments. The globally accepted definition of subsidy, as defined by the World Trade Organization (WTO) was taken as most appropriate independent reference. The list below outlines the government subsidies as outlined by this definition, that these two Middle East nations have injected into their state-run airlines.
WTO Definition of a Subsidy:
(i) a government practice involves a direct transfer of funds (e.g. grants, loans, and equity infusion), potential direct transfers of funds or liabilities (e.g. loan guarantees);
(ii) government revenue that is otherwise due is foregone or not collected (e.g. fiscal incentives such as tax credits);
(iii) a government provides goods or services other than general infrastructure, or purchases goods;
(iv) a government makes payments to a funding mechanism, or entrusts or directs a private body to carry out one or more of the type of functions illustrated in (i) to (iii) above which would normally be vested in the government and the practice, in no real sense, differs from practices normally followed by governments.
It’s time to take action.
We are calling on our individual nations and European Union governing bodies to enforce international aviation and trade rules, ensure competition is fair, and end market distortion as a consequence of excessive state subsidies in the Middle East.
Europeans For Fair Competition is about:
- Promoting, restoring and protecting a level playing field for European aviation;
- Promoting fair and balanced air service agreements and enforcement of compliance with them;
- Safeguarding European aviation workers from the threat of job loss due to unprecedented state-subsidized airline expansion;
- Providing solutions for how air service/open skies agreements should address a disproportional flow of state subsidized carrier
capacity to and from Europe.
We are calling on our individual nations and EU governing bodies to enforce international aviation rules, develop appropriate and effective trade defense instruments for violations of agreements, ensure competition is level, and end the Gulf subsidies.
Government Subsidies are harmful to Europe:
• European airlines can compete with Middle Eastern airlines, however, it is an entirely different thing to compete with Middle Eastern governments that heavily subsidize their state-owned airlines for strategic means.
• These state-subsidized carriers, Emirates, Etihad Airways, and Qatar Airways, are dumping seat capacity to distort the international airline marketplace and pushing EU airlines out of the market without creating additional demand.
• Middle Eastern airlines are purchasing disproportionate quantities of wide-body airplanes. These aircraft are being used to flood markets with excess capacity (seat-dumping). Without state subsidies, such purchases would not be commercially possible.
• A net 600 European-based jobs are lost for every route lost or forgone to one of the three Middle East carriers.
• As European carriers begin to lose long-haul routes to their subsidized competition, they are not able to sustain their vital intra- European short haul routes and therefore European consumers have fewer travel options with fewer airlines competing for their business.
Learn about the subsidized carriers:
Emirates, the national airline of Dubai, has collected subsidies from their government since 2004. Learn the different ways they have collected subsidies from the United Arab Emirates.
Etihad is the state-owned airline of Abu Dhabi, in the United Arab Emirates. Take a guess, how much do you think they have received in subsidized support from their government?
Qatar Airways never needed to depend on profits to keep their airline in business. When funds are running low, they can depend on a check from their government. Who else is going to buy all of those A350s?