Airlines create jobs

European airlines opposing the expansion of Gulf rivals into their home markets may be overstating the amount of financial assistance Middle Eastern carriers receive. At the same time, they may be understating their importance in preserving European manufacturing jobs, say industry officials and analysts. While European airlines have long lobbied their governments to oppose granting additional landing slots to carriers including Emirates Airline, Etihad Airways and Qatar Airways, they have opened a new front focusing on the role of export credit assurance.

Pierre-Henri Gourgeon, the chief executive of Air France, this week upped the ante in the long-running dispute saying Europe's role as an aviation centre was "a role we need to value and defend". He asked authorities to help develop a strategy "that gives us a chance to resist". The Middle East's airlines, he said, were "very dangerous for Europe". However, Saj Ahmad, an analyst and industry commentator based in London, said European governments were keenly aware of the tens of billions of dollars these airlines were pouring into the coffers of Airbus, which has manufacturing bases in the UK, Germany, France and Spain.

"Europe cannot afford to prevent GCC airline growth within Europe because the risk of Airbus losing big orders is very real," said Mr Ahmad. The importance of Emirates Airline was made clear when it announced at the Berlin Air Show in June it had signed a US$11.5 billion (Dh42.24bn) deal to buy 32 new Airbus A380s, in a high-profile ceremony attended by the German chancellor Angela Merkel. This week, European airlines are set to take up the issue of export credit agencies in member nations of the Organisation for Economic Co-operation and Development and how they have benefited Gulf carriers. These agencies help foreign airlines finance purchases of Boeing and Airbus aircraft but do not help their home airlines such as British Airways, Lufthansa and Air France, or the big American carriers. Interest rates arranged by the export credit agencies have been as much as 4.5 percentage points lower than those arranged by American and European airlines.