Europe ‘subsidising’ Middle East aviation says BA boss

The European Union is funding the rise of Middle East airlines which pose a growing threat to its own carriers,  British Airways chief executive Willie Walsh has claimed.

“We have been slow in the UK and in Europe to recognise the competitive threat,” Walsh told a meeting of the European Aviation Club in Brussels on Wednesday. “We should be concerned about what is happening.”

Emirates of Dubai, Etihad Airways of Abu Dhabi and, to a lesser extent, Qatar Airways have led an extraordinary growth in air traffic in the oil-rich region, developing worldwide networks from hubs that face few planning restrictions and are competing in the long-haul markets of carriers such as BA.

Walsh referred to an agreement between the US and Europe that prohibits government credit guarantees to airlines in the home countries of Airbus and Boeing, while allowing export credits to the Middle East, and said it amounted to Europe “funding the expansion of Emirates”.

The deal excludes BA, Lufthansa and Air France-KLM from government credit assistance to buy aircraft at a time when Emirates is rapidly expanding its fleet with an order for 90 Airbus A380 ‘superjumbos’.

Walsh said: “We are financing our competitors by providing them with cheap access to capital. This is a very significant threat.”

Emirates president Tim Clark said European governments recognised the importance of his airline, saying: “They will tell you, ‘The last thing we want to do is to upset Emirates’. We are the only ones buying aircraft.”

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