April 15, 2015 / 12:17 PM / in 2 years

Abu Dhabi's Etihad Airways CEO warns Europeans against protectionism

An Airbus A380 rolls out of a paint hangar during a branding ceremony of Etihad Airways, the national airline of the United Arab Emirates (UAE), at the German headquarters of aircraft company Airbus, in Hamburg-Finkenwerder September 25, 2014. REUTERS/Fabian Bimmer

ABU DHABI (Reuters) - The boss of Abu Dhabi’s Etihad Airways has warned Europe that it will suffer if it restricts the access of foreign carriers to its market, in a fresh effort by fast-growing Gulf airlines to head off what they see as Western protectionism.

Chief executive James Hogan met with the European Union’s Transport Commissioner Violeta Bulc this week to stress the benefits of Etihad’s operations to European consumers and economies, an Etihad statement said on Wednesday.

“Etihad Airways is committed to Europe. But growing resistance to us from a handful of protectionist competitors could have unintended consequences well beyond limiting our development,” the statement quoted Hogan as saying.

“If our growth is curtailed or our investments in airlines are compromised, the real damage will be to Europe in lost jobs, lost flight connectivity, lost investment in local and national economies and lost consumer choice.”

State-owned Etihad is making increasing inroads into Europe, partly through equity investments in Air Berlin (AB1.DE), Air Serbia, Aer Lingus AERL.I and Alitalia CAITLA.UL.

This has aroused opposition from European carriers such as Air France-KLM (AIRF.PA) and Lufthansa (LHAG.DE), which along with some U.S. competitors have long complained that the Gulf airlines are benefiting unfairly from interest-free government loans and cheap fuel. The Gulf carriers deny those accusations.

The Etihad statement did not say which particular business issues Hogan was concerned about in Europe, and a spokesman for the airline declined to comment on Wednesday.

Under a bilateral traffic agreement between the United Arab Emirates and Germany, UAE carriers may fly to only four German airports: Frankfurt, Munich, Hamburg and Duesseldorf.

Last month Germany approved a summer flight schedule allowing Air Berlin and Etihad to share some flights not covered by the agreement, such as Berlin-Abu Dhabi and Stuttgart-Abu Dhabi, but the German transport ministry said last week this “should remain an exception”.

Emirates airline, based in neighboring Dubai, has also responded strongly to Western criticism. The airline rejects all allegations of unfair subsidies made by U.S. airlines and will expect an apology from them, Emirates president Tim Clark said last month.

Etihad’s core operations in the EU contributed $1 billion to the combined gross domestic product of the 28 EU nations last year and supported more than 11,000 jobs there, Hogan said. Its purchases of European aircraft and equipment contributed more.

Editing by Andrew Torchia

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