Thursday 16 December 2010

Gulf Carriers Use Youth, Cash to Squeeze Western Rivals With 300 Planes - Bloomberg

Emirates, Etihad Airways and Qatar Airways Ltd. say it’s their youth, not state aid, that has allowed them to put the squeeze on western rivals with almost 300 plane purchases worth $70 billion in three years.

The expansion of the Gulf carriers has drawn the ire of Air France-KLM Group Chief Executive Officer Pierre-Henri Gourgeon, who says Dubai-based Emirates has 3.5 billion euros ($4.7 billion) less in annual costs because it is state-owned. Tilting the playing field further, he says, is a treaty barring airlines in Britain, France, Germany, Spain and the U.S. from receiving credit guarantees for purchases from Airbus SAS and Boeing Co.

“I’ve got one secret weapon and it’s that I’m not a legacy carrier,” Etihad CEO James Hogan said in an interview in London. “If these chaps had been setting up an airline in the last seven years they’d be doing exactly what I am.”

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