“We know there hasbeen clear evidence ofa progression towardsaeropolitical multilateralism
in the past 20 years. More
and more countries arerecognising that liberalair access has a multipliereffect on their economicsand protection of theirnational carriers no longerstacks up in the cost-benefit equation or servestheir national interest.
Unwittingly, they have been
subsidising their nationalcarriers through a fortressmentality of aeropoliticalprotection and theelimination of competition,and other primary sectorsof their economies havesuffered as a result.”
Tim Clark, PresidentEmirates Airline
“Spearheading the region’s development strategy, and emblematic of the economic success of the UAE, Gulf carriers
benefit from financial support from their local state…”
Emirates is run as a fully commercial business, unlike many European carriers. It is certainly true that aviation is a
key strategic policy and sector in Dubai, as it is in many countries like Singapore, Hong Kong, Malaysia or Germany
- and that the Government of Dubai’s vision is to be a world leader in international aerospace. This comes throughopen skies policies, careful planning and pro-aviation policies (see pages one and eight).“The Emirates Group…has limitless access to capital and state money is used to build infrastructure megaprojectssuch as airports. Also, since there is no income tax, it is able to employ staff at a much lower cost...”
Air CanadaPilots Association
Emirates is the dedicated tenant of Dubai International Airport’s Terminal 3. However, Emirates did not fund theconstruction of the facility and pays for its usage in the form of airport landing charges and leases. In terms of the
staff costs which Emirates bears, US$500 million alone in expatriate benefits per annum is a significant number and
is evidence that although differently structured, our employee cost base is comparable to other international airlines(see pages one and seven).“The government is helping finance Emirates’ wide-body aircraft orders.”
Emirates operates on a wholly commercial basis and receives no funding or support for its aircraft orders from theGovernment of Dubai - facts corroborated by the world’s leading investment banks and finance companies. Rather,it is the commercial market which finances Emirates’ aircraft fleet, based on its confidence in our business model,strategy and long-term financial plan (see page three).
“(Emirates is) taking advantage of export credit guarantees to purchase the A380 they have ordered.“
Such export credit-backed funding is deliberately aimed at and used by numerous international airlines for aircraft
orders - is an internationally accepted export driver for both EU Member States as well as the US. European credit
agencies and represents only a relatively small proportion of Emirates’ total sources of financing (see page three).
“We have doubts on how Emirates can finance its A380s. Where are you going to get the money?”
Leo van Wijk,Ex-CEO KLM
Emirates sources finances in a fully transparent manner from commercial banks, bond issues, operating leases andvia asset-backed debt, as well as from other non-conventional sources such as Islamic funding and from outside
foreign investors. To date, US$22 billion has been raised from these sources (see pages three and four).
“(Dubai Government’s ownership of Emirates together with control over the airport authority, air navigationservices, ground handling agent, leading hotel groups, etc.,) results in non-transparent structures which most likelylead to significant beneficial treatments of Emirates compared to other airlines.”
Arthur D Little Consultancy
Emirates is treated the same as every other airline operating at the Dubai International Airport in terms of airport
and landing charges. Dubai has fully open skies. More than 130 international airlines today serve Dubai, suggesting
that inter-airline competition is both robust and welcomed (see pages three and four).“There are clear advantages based on the geographic location of Dubai - having some of the largest oil fields in its
direct surroundings (i.e. lower transportation, distribution/storage/logistics and refining costs).”
Arthur D LittleConsultancy
There is minimum oil refining capacity in the UAE/Dubai. Both oil and jet fuel prices are traded globally, so the jet fuel
prices paid by Emirates in Dubai are similar to those paid anywhere in the world (see page six).“Emirates is unfairly advantaged by the benefits of oil revenues.”
Geoff Dixon, Ex-CEO Qantas
Oil accounts for only 4% of Dubai’s GDP, a figure which goes down every year. Emirates pays the same market
rates for jet fuel as Qantas and other international airlines around the world, as shown in our published accounts.
If Mr Dixon means this is because the UAE benefits from oil, the same can be said of Australia and its uranium or
natural gas or iron ore revenues (see page six).“The infrastructure in Dubai in terms of taxes and conditions is better than in Europe, which gives Gulf carriers anedge. There is widespread concern that there is an uneven playing field.”
Dubai’s investment in essential airport infrastructure for the future mirrors what cities such as Bangkok, Kuala
Lumpur, Athens and Berlin have recently done - something which any growth-focussed city needs to do if it islooking ahead. The real uneven playing field though is between the aeropolitical protection often enjoyed by acarrier such as Lufthansa in Germany, compared to the fully open skies environment at Emirates’ base in Dubai(see pages seven and eight).
Myths vs facts