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Feelings are still running high when it comes to relations between the big three Middle Eastern carriers and the big legacy US carriers …..and Emirates has just fired the latest shot in a war of words that shows no sign of abating.
In recent weeks we’ve seen Qatar Airways setting out its aim to take a 10% stake in American Airlines, Doug Parker penning a rather weak missive to American’s employees attacking the Middle Eastern carriers and Delta releasing a factually flawed video which was also aimed attacking the Middle East three….so there’s not much love lost between the rival airlines.
Amusingly, despite how abhorrent the ME3 apparently are to the US legacy carriers, American Airlines doesn’t appear to have any issue having frequent flyer agreements with Qatar Airways and with Etihad….although the airline has, as of yesterday, announced that it will cease to codeshare with Qatar and Etihad.
Also, despite how much the US3 appear to hate government subsidies (that would be all government subsidies except the ones that apply to them), Delta has no issues owning a stake in China Eastern which has had more than its share of government subsidies – clearly hypocrisy isn’t an issue in Atlanta.
The US carriers have also been making big noises about how the rise of the ME3 is bad for US jobs while conveniently forgetting that American Airlines gave half of its “largest commercial aircraft deal in history” to Airbus (a European company) and Delta has chosen to order Airbus A350 aircraft after cancelling its order for 18 Dreamliners from US-based Boeing.
So much for supporting US jobs 🙂
Anyway…..
It would seem as if Emirates is pretty keen to go on the offensive when it comes to claims that its expansion is bad for US jobs. The airline has brought out a report (written by Campbell Hill Aviation Group) highlighting the positives it brings to the US economy.
The report tells us, amongst other things, that…..
Emirates supported more than 104,000 American jobs and contributed US$21.3 billion in revenue to the U.S. economy, including US$10.5 billion to the country’s gross domestic product (GDP) and US$6.4 billion of labor income in 2015
The catalytic impact of Emirates’ U.S. operations brought over 580,000 new travelers to the U.S. who otherwise would not have travelled there, and generated US$3.2 billion of new trade-based revenue
Indirect spending within the U.S. by newly stimulated passengers combined with new merchandise and service trade created approximately 30,000 jobs, and US$4.6 billion of new revenues for U.S. businesses, including US$1.7 billion of labor income and US$2.5 billion of GDP
On top of all that the report highlights that Emirates buys more Boeing 777 aircraft than any other airline in the world which “generated approximately US$1.5 billion of direct revenue to the U.S. aircraft manufacturing sector, supported approximately 1,700 direct jobs, US$230 million in labor income and contributed US$445 million to U.S. GDP”
Thoughts
Just as I wasn’t exactly surprised when a Delta commissioned report showed that Qatar Airways has received $491m in subsidies I’m not really surprised that a report commissioned by Emirates is coming down on the side of the Middle Eastern carrier….but there are some interesting elements to it.
I don’t doubt for a minute that Emirates contributes more to the US economy than it takes out of it….. but I’m just not sure what the net figure is. It could be $21bn or it could be less…but the figure shouldn’t be the point.
The point is that Emirates’ existence is almost certainly a net positive for the US economy and the complaints by the US3 have less to do with protecting US jobs and more with protecting their record profits.
If the US legacy carriers were truly invested in protecting US jobs they wouldn’t be buying aircraft made almost entirely outside of the US and if the Middle East 3 are really as awful as they claim they wouldn’t be partnering with them.
All the noise from the US3 is nothing more than an attempt to get the government to implement protectionist policies that will do little for US jobs but will do a lot for the airlines’ bottom lines.
Read the executive summary of the Campbell-Hill Aviation Group report here (PDF)
Read the full Campbell-Hill Aviation Group report here (PDF)
