Bloomberg/Dubai
Etihad Airways, facing US and European claims that it benefited from unfair subsidies, said the accusations amount to protectionism that threatens its business.
Efforts by the three biggest US carriers and European counterparts to restrict Etihad’s expansion are a major concern for the company and could stem the growth of its network, chief executive officer James Hogan said yesterday in a statement.
“We are currently faced with unprecedented external challenges,” Hogan said as Etihad announced a 52% jump in annual earnings. “Of particular concern has been the rise in aggressive protectionist sentiment in Europe and the US, where both Etihad and its partner airlines are being targeted.”
American Airlines Group, Delta Air Lines and United Continental Holdings said in a report to the Obama administration that Etihad has received $17bn in subsidies since 2004, including interest-free loans, equity infusions and fee exemptions, prompting the government to begin an investigation. In Europe, Etihad has faced scrutiny over its minority investments in local carriers, while the Netherlands has said it will deny additional access over the aid claims.
Hogan has in turn said US carriers have had $64.9bn in bankruptcy and pension aid.
“Despite these hurdles, Abu Dhabi-based Etihad will continue to grow as planned in 2015,” Hogan said, adding that its expansion proceeded “strictly to plan” last year.
Net income at Etihad reached $73mn in 2014 as the passenger tally increased by 22% to 14.8mn, revenue rose almost 27% to $7.6bn and the company’s stakes in other airlines drove transfer traffic.
Etihad is vying with Gulf rivals Qatar Airways and Emirates of Dubai in seeking to funnel inter-continental passengers via its hub, a strategy that’s at the heart of the attacks from Western competitors.
Etihad added 10 new destinations in eight countries last year, including Los Angeles, Dallas and San Francisco - routes that prompted accusations from US airlines that the Gulf carriers are rushing to add capacity before a possible suspension of a bilateral treaty in the spat about subsidies.
The company, No 3 in the Gulf behind Emirates and Qatar Airways, introduced its first Airbus A380 and first Boeing Co 787-9 last year, and will take delivery of 16 planes this year, including four 787s and four A380s.
Etihad has joint plane-purchasing arrangements with its equity partners and will development that relationship further through a global funding platform with Alitalia, Air Berlin, Air Serbia, Air Seychelles and Jet Airways India.
Hogan: Expansion strictly according to plan.
