Tim Clark, president of fast-growing, Dubai-owned Emirates Airline, took vigorous exception Tuesday to claims leveled by the three largest U.S. carriers that Emirates receives trade-distorting subsidies from its government owner.

Speaking at the National Press Club in Washington, Mr. Clark said his company was established 30 years ago under "clear rules of no subsidies" and hasn't deviated from that approach except for receiving "seed capital" when it was just getting underway. The government of Dubai gives "no support for the operation," he said, and expects Emirates to make its own way.

In late January, American Airlines Group Inc. (AAL), United Continental Holdings Inc. (UAL) and Delta Air Lines Inc. (DAL) began circulating to Washington policy makers a 55-page report that alleges Emirates and its Gulf rivals, Etihad Airways of Abu Dhabi and Doha-based Qatar Airways, have received more than $40 billion in subsidies and unfair advantages since 2004. The three big U.S. airlines are pressing their government to try to persuade the United Arab Emirates and Qatar to amend their liberal air treaties with the U.S. to "level the playing field." Failing that, the three big U.S. airlines want Gulf carrier access to be frozen or for the treaties to be revoked.

Mr. Clark said he made the rounds in Washington among the same policy markets and found the discussions "very constructive." He vowed that his airline will formulate "a line-by-line" response to the lengthy U.S. report and will "rebut" all the allegations. He also mentioned "being given the benefit of an apology" by the people who made them, and questioned the fact that the report wasn't made public -- and visible to him and his Gulf rivals -- until two weeks ago.

Emirates, which now serves 9 U.S. cities with 84 flights a week, intends to progress with its plans of growing to serve 20 U.S. airports, Mr. Clark said. Last year, Emirates delivered 2.4 million passengers to the U.S., 1.7 million of whom were coming from multiple points in Africa, the Middle East and other points that U.S. airlines don't serve. About the three U.S. carriers, he said, "the smart thing for these guys to do is to work with us, not against us."

This is not the first time Emirates has been accused of subsidies, he said. Asked Tuesday about an allegation in the U.S. carrier report that Emirates unloaded $2.4 billion in fuel-hedging losses on its government owner, Mr. Clark responded "Tosh." He said some figures and the conclusions in the report were "incorrect", but sidestepped a question about whether Emirates or Dubai was mulling legal action.

Emirates, by far the largest of the three Gulf airlines, said the U.S. policy of signing liberal "open skies" air treaties with other nations represented "watershed aeropolitical thinking" that has moved other countries to open up their skies to foreign carriers. "I do not believe the United States would be minded to change its open-skies policy," Mr. Clark added.

He said his company could make the case that U.S. carriers have received government support, including a $5 billion payment after the Sept. 11, 2001 terrorist attacks closed U.S. airspace for three days; a federal loan-guarantee program to prop up U.S. airlines reeling from the 9/11-induced drop in traffic; the rules of Chapter 11 bankruptcy, which allow U.S. carriers to dump their pension obligations and take concessions from employees and creditors; and U.S. policy that allows airlines to create tight revenue- and cost-sharing joint ventures across oceans with some of their best airline partners.

The CEO of Etihad Airways made a similar case in a separate presentation Tuesday in Washington. Representatives of Qatar Airways couldn't immediately be reached, but its CEO, Akbar Al Baker has said repeatedly that funds his company receives from the state are equity, not subsidy. He also has blasted the U.S. airlines for their poor customer service and old planes.

Write to Susan Carey at susan.carey@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

American Airlines (NASDAQ:AAL)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more American Airlines Charts.
American Airlines (NASDAQ:AAL)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more American Airlines Charts.