(MENAFN- Emirates News Agency (WAM)) Etihad Airways released a report authored by UK-based The Risk Advisory Group that documented in detail benefits valued at more than $70 billion which Delta, United and American have received from the US Government and judicial processes and mechanisms available only in the United States.
These benefits included massive debt write-offs in multiple bankruptcy proceedings, government assumption of airline employee pension plans and bespoke tax benefits.
Etihad Airways does not question the US Government's right to make these benefits available to US carriers, and nor does it criticize the US carriers for taking advantage of these substantial and valuable benefits.
Instead, Etihad Airways commissioned this report to highlight the environment in which it has to compete and the hazards of unilaterally labelling different funding strategies as subsidies, and otherwise mischaracterizing the way a competitor conducts its business.
REVIEW OF US CARRIERS' ASSERTIONS On 22 May, 2015, Etihad Airways released a report drafted by Washington, D.C.-based Edgeworth Economics. Etihad Airways' instructions to Edgeworth were simple: review the economic claims made by Delta, United and American and provide an independent critique of their assertions.
Edgeworth conducted a detailed review and concluded, among other things, that air routes between the United States and the Indian Subcontinent (ISC), on which over 65 per cent of Etihad Airways' US passengers fly, are highly competitive.
They found that Etihad Airways' US competitors largely choose not to serve these routes directly. They instead fly passengers to Europe and connect them onto non-US partner airlines, a practice that often requires passengers to make additional stops.
Edgeworth also determined that Etihad's published fares on these routes were consistent with those of competitors, even though the revenue per kilometer generated on these ISC routes was considerably less than the immunized US and European carriers receive on their protected North Atlantic routes.
Most significantly, Edgeworth found that even though there is more capacity on these ISC routes in 2014 than there was in 2009 (the result of increased competition), there continues to be considerable demand for that capacity.
Between 2009 and 2014, US airlines and their immunized joint venture partners actually carried over 250,000 more passengers between the US and the ISC € that is a gain of over 18 per cent.
In 2014, Etihad Airways delivered 182,000 connecting passengers to US airlines including American, United, Delta and Jet Blue. This is forecast to grow to approximately 300,000 in 2015, an increase of 65 per cent, following the introduction last year of new routes to Los Angeles, San Francisco and Dallas Fort Worth.
Etihad Airways is proud to contribute to the success of Open Skies, while maintaining a load factor at approximately 80 per cent on average.
ECONOMIC CONTRIBUTION STUDY Issued on 27 May 2015, and drafted by Oxford Economics, this detailed Etihad Airways' contribution to the US economy.
Oxford valued at $2.9 billion the contribution Etihad Airways will make to the US economy in 2015 through capital expenditure, passenger and cargo services, direct and indirect employment and contribution to tourism.
This research also calculated that Etihad Airways would employ, or contribute to the employment of over 23,000 Americans in 2015.
Additionally, Oxford projected that the value of our contribution would grow to $6.2 billion by 2020, supporting more than 46,000 American jobs.
While Delta, United and American expend considerable money on advertising and other tactics that claim Etihad Airways threatens American jobs, Oxford conclusively demonstrates, on the contrary, we have a very positive impact on the US economy and workforce.
Mr Hogan said the Etihad Airways had clearly demonstrated that it was contributing not only to competition in the skies, but also to the US economy.
"We believe in competition and consumer choice," he said. "It is now time to get back to the business of providing high quality air services and enhancing consumer choice, just as Open Skies intended. Let's keep the skies open."
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.