Airlines' summit highlights shift of power to Gulf carriers

Tue Jun 3, 2014 5:37pm EDT
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By Victoria Bryan and Praveen Menon

DOHA/DUBAI (Reuters) - Qatar sealed its position at the center of a new aviation map this week as host to the annual meeting of the global airline industry's International Air Transport Association (IATA), but the Gulf country and its neighbors drew criticism from rivals about trade and investment policies.

Senior representatives of over 200 airlines attended the IATA meeting in Doha, making Qatar the first Gulf country to host the summit, which was attended by its fiercest critics.

"I hope people understand that although we are a small country, we are a very relevant country in this region," said Qatar Airways' chief executive Akbar Al Baker.

But a trio of major Gulf carriers fell short of winning the hearts and minds of U.S. and European carriers, who continue to see them as a threat and question their growth model.

Western airlines rekindled complaints about a lack of transparency among Gulf carriers at the event, on the back of recent reports that fast-growing Etihad Airways, which has bought stakes in Air Berlin (AB1.DE: Quote) and Aer Lingus AERL.I among other carriers, had access to an interest-free $3 billion loan from Abu Dhabi's ruling family.

Etihad's chief executive James Hogan and the heads of its neighboring competitors, Dubai-based Emirates and Qatar Airways, declined to comment.

But European rivals who feel threatened by the new competition were openly critical on the sidelines of the June 1-3 meeting.

"We all read in the papers where the money came from, so I would consider Etihad to be in the ownership of the state, and therefore it's state money we see flowing here," Lufthansa's (LHAG.DE: Quote) chief executive, Carsten Spohr, said when asked about the reports.   Continued...

A delegate of the 68th International Air Transport Association (IATA) annual general meeting is pictured through an IATA logo in Beijing June 11, 2012.  REUTERS/Jason Lee