After three U.S. carriers; Delta Air Lines, United Airlines and American Airlines have asked the administration of the US president, Barack Obama, to not allow Arabian Gulf carriers to add more routes into the US, pending a review of open skies agreements, a campaign was launched to keep the skies open. US carriers claims that Etihad, Emirates and Qatar Airways have received more than $40 billion in state subsidies. Etihad Airways has answered U.S. carriers with a research revealing these US airlines have also received benefits valued at US$71.48 billion.
The research has quantified a range of government and court-sanctioned benefits and concessions received by the three biggest US carriers, Delta Air Lines, United Airlines and American Airlines Group, and other airlines with which they have merged.
These US airlines have received benefits valued at US$71.48 billion, more than US$70 billion of which has been since 2000, enabling the nation’s three largest carriers to transition from the verge of bankruptcy to today’s industry leaders, each achieving multi-billion dollar profits.
The international consultancy The Risk Advisory Group, which conducted the research for Etihad Airways, identified that the majority of benefits which accrued to Delta, United and American came from restructuring under Chapter 11 of the US Federal Bankruptcy Code, yielding them at least US$35.46 billion, and additional pension fund bailouts totaling US$29.4 billion from the US Government’s Pension Benefit Guaranty Corporation.
Last year, the three big US carriers generated collective net profits of US$8.97 billion, equivalent to 45 per cent of the total US$19.9 billion profits achieved in 2014 by the global airline industry. The trend has continued into 2015, with all three major US airlines announcing strong net profits for the first quarter.
Etihad Airways has consistently denied claims by Delta Air Lines, United Airlines and American Airlines that it received subsidies, and has stated publicly that it has received equity and shareholder loans from its sole shareholder, the Government of Abu Dhabi, the largest emirate and capital of the UAE.
The Risk Advisory Group identified the largest beneficiaries of Chapter 11 restructuring and bailouts from the Pension Benefit Guaranty Corporation as:
- United Airlines, with combined benefits estimated at US$44.4 billion;
- Delta Air Lines with combined benefits estimated at US$15.02 billion; and
- American Airlines with combined benefits estimated at US$12.05 billion.
Of these figures:
- United achieved one-time bankruptcy debt relief totalling US$26 billion, and pension termination benefits totalling US$16.8 billion;
- Delta Air Lines achieved bankruptcy debt relief totalling US$7.9 billion, and pension termination benefits totalling US$4.55 billion; and
- American Airlines achieved bankruptcy debt relief totalling US$1.56 billion, and pension termination benefits of US$8.08 billion.
These figures include restructuring and bailout benefits achieved by other US airlines, since absorbed by Delta Air Lines, United Airlines and American Airlines.
The General Counsel and Company Secretary of Etihad Airways, Jim Callaghan said the current claims by United Airlines, Delta Air Lines and American Airlines that they were being harmed by Etihad Airways were baseless, and an attempt to obstruct higher-quality competition.
“There is no evidence whatsoever of any harm caused by Etihad Airways to any of the three big US airlines,” Mr Callaghan said.
“The US Open Skies policy has delivered more choice and better service for millions of consumers, more airline access to and from America, and record profits for the biggest airlines in the US. It is time to refocus on the real issue here – that the Open Skies policy is delivering the benefits it was designed to deliver, and that everyone is a winner.”
For more information about Etihad Airways’ campaign to keep the skies open, please visit: www.KeepTheSkiesOpen.com