European Parliament vs. the Gulf Carriers

Europe and the Gulf carriers: a complex relationship

Europe and the Gulf carriers: a complex relationship

The Gulf carriers, or MEB3 (Emirates, Qatar Airways and Etihad) as some like to call them, have shifted the center of gravity of the aviation industry in the last decade. 

But the fast growth of the Gulf carriers has raised some eyebrows. In America several airlines have come out openly with accusations of there being an uneven playing field.

In Europe this situation is compounded by the serial purchase of equity stakes in ailing European airlines, particularly by Etihad. No wonder this has led to lobbying from large European carriers, that, after seeing their short haul business eroded and transformed by low cost carriers, they see now how high-value long-haul traffic is being siphoned off their European hubs towards the new glittering aeropolis of the desert.

Concerns about alleged unfair competition have been echoed in Brussels and Strasbourg, where a number of MEPs have asked the Commission to look into this matter.

In particular, the initiative calls for a stronger financial transparency on the side of the Gulf Carriers, as well as a more effective monitoring of airline ownership rules. While equity ownership has in all cases remained within the allowed 49%, there have been calls to investigate whether the principle of "effective ownership" is being observed. 

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This is quite a contentious issue. The Gulf carriers insist the accusations are unfounded, while the Europarliament may request the European Commission to make more transparent financial disclosure a pre-condition when negotiating EU-wide bilateral aviation agreements with third countries.

This is a delicate issue to trample with, because there is an entaglement of powerful business interests at play. To their need to have continued access to the European markets , the Gulf carriers contrapose their massive Airbus orders, on which some aircraft programmes, like the A380, depend massively. 

To this last point, some articles have pointed out that the bulk of aircraft orders has already been signed and it will take time for these airlines to digest them before they are in a position to order more...this might underscore the huge importance of the aviation industry in some constituencies though and their sensitivity to anything that puts them at risk.

But let's also not forget the European Parliament, despite its relatively low profile among the continent's public opinion, has already shown its teeth in other trans-continental high profile, high stakes cases, like those pitching it to corporate behemoths such as Microsoft and Google...

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