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UPDATE 1-Emirates Airline rejects Delta's criticism of overcapacity on Dubai-US routes
August 12, 2015 / 2:50 AM / 2 years ago

UPDATE 1-Emirates Airline rejects Delta's criticism of overcapacity on Dubai-US routes

(Adds comment from U.S. airline-union group)

By Nadia Saleem

DUBAI, Aug 11 (Reuters) - Emirates Airline said Tuesday that state-owned Gulf Arab airlines were not to blame for overcapacity on services between the United States and Dubai, rejecting criticism by U.S. carrier Delta Air Lines .

Delta said Sunday it had reduced flights between Atlanta and Dubai this winter, blaming overcapacity on U.S. routes to the Middle East by subsidised and state-owned airlines, underscoring a trade row.

Delta’s attempt to pin the blame on Gulf carriers is “plainly a political play, or a thin excuse to prop up fares at a higher level by limiting capacity”, an Emirates spokesperson said in a statement.

The Partnership for Open & Fair Skies, a U.S. airline-union group including Delta, alleges Emirates, Etihad Airways and Qatar Airways received $42 billion in subsidies from their governments in the past decade. They say this allowed the Gulf airlines to start dumping capacity into the United States, driving down prices and pushing out competitors.

Gulf carriers deny they are subsidized and say poor customer service has caused U.S. airlines to lose market share.

Emirates, citing U.S. Transportation Department data, said average seat loads during 2013-2014 on the Atlanta-Dubai route had been consistently above 85 percent, showing consumer demand or overcapacity was not the issue.

A Partnership spokeswoman, however, said full planes do not necessarily indicate a route’s profitability because airlines discount seats and let frequent fliers travel free.

Delta is the only airline offering direct flights between Atlanta and Dubai. It will reduce that service to four or five times a week from Oct. 1 instead of daily. That will leave rival United Continental’s Washington-Dubai service as the only daily non-stop flight between the United States and Dubai on a U.S. carrier.

Emirates flies to nine U.S. cities and said its average seat loads on these services was above 80 percent.

The accusations of government subsidies are part of a campaign by the U.S. airlines to persuade the Obama administration to start talks on Open Skies treaties with the Gulf countries. This is currently under review.

Gulf airlines have said it would be protectionist of the U.S. government to tighten trade policies that have in the past benefited U.S. airlines in the absence of large rivals. (Additional reporting by Jeffrey Dastin in New York; Editing by Susan Fenton and Miral Fahmy)

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