The white paper published in early 2015 that exposes the massive subsidies given to Emirates, Etihad, and Qatar Airways, clearly outlines how the nation states funding them plan to expand their networks with the specific aim of undermining competition by growing with no correlation to profit or market demand:
“Both Etihad and Qatar have placed huge orders for aircraft, which were more than matched by earlier orders by Emirates, which included 45 Airbus A380s.
In 2008 alone, in the midst of a worsening industry crisis, Etihad ordered 96 new aircraft, of which 70 were large twin aisle jets and six were Airbus A380s.
It is hardly surprising, then, that in summer 2009, when US, European and Asian airlines were cutting frequencies and capacity in response to falling demand, weekly seats offered in July 2009 on routes between the Gulf and Europe or the Gulf and Asia were some 17 per cent higher than in July 2008 (IATA, 2009)!
This additional capacity would destabilize not only these two markets but was also targeting the Europe – Asia through traffic with a stop in one of the Gulf airports. Inevitably yields in all these markets would be driven down.”
Gulf Share of International Long-Haul Bookings, 2014
Airports with international capacity that are served by Emirates
Airports with international capacity that are served by Etihad
Airports with international capacity that are served by Qatar Airways
*That generate at least 1M annual long haul bookings
Learn more about the subsidized Gulf carriers:
Emirates is the state-owned airline of Dubai and has collected subsidies from their government since 2004. Learn the different ways they have collected their subsidies from the United Arab Emirates.
Etihad Airways is the state-owned airline of the emirate of Abu Dhabi. Take a guess, how much do you think they have received in subsidized support from their government?
Qatar Airways never had 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?