Etihad Airways Reports Loss After Subsidies
Etihad Airways Reports Loss After Subsidies
Etihad Airways Reports Loss After Subsidies. A new report claims that Abu Dhabi-based Etihad Airways lost USD 2.1 billion in 2015, even after receiving USD 1.7 billion in subsidies from the United Arab Emirates government."The findings of Etihad's finances are further evidence of what is already a mountain of evidence: Gulf carriers are heavily subsidized and do not operate as lucrative and fair companies," Delta CEO Ed Bastian said in a statement. prepared.
The report was published by the Association for Open and Fair Skies, which represents American, Delta and United and most of its unions. The group opposes the rapid growth of US service by subsidized airlines in the Middle East, in violation of the Open Skies treaties that allow growth.
The association is gaining increasing support from members of Congress, including Texas Senator Ted Cruz, a Texas Republican who recently wrote to three cabinet members to voice concerns about the violations.
"Failing to comply with our trade agreements harms US companies, workers, communities and consumers whom these agreements were intended to protect," Cruz wrote in a letter posted on its website.
So far, 273 House and Senate legislators have written letters in support of the implementation of the Open Skies agreement. The intention is to get support from the Trump administration.
"We are grateful for the broad and bipartisan support we have received from members of Congress who agree that we need to stop deceptive trade, enforce our agreements, and protect American jobs," Bastian said.
Etihad has said it had a profit of USD 103 million in fiscal year 2015.
What he did not say, according to the report, is that in 2015 he received USD 1.4 billion in cash from the Abu Dhabi government in 2015, as well as a USD 270 government-free loan from the government. In addition, Etihad reported a gain of USD 1.9 billion from the sale of its loyalty program and cargo-related subsidies, but received no payment for transactions by December 31, 2015, the association said.
In addition, Etihad had an operating loss of USD 1.4 billion in fiscal year 2014, the association said.
Forensic accounting is necessary, said the association, because Etihad does not publish financial statements.
"The United Arab Emirates continues to support Etihad Airways despite devastating financial losses," association spokeswoman Jill Zuckman said in a prepared statement. "Without its annual allocation of its government owners, Etihad Airways could not exist."
While Qatar reported earning USD 540 million in fiscal year 2017, the association said the airline had an operating loss of USD 703 million and received USD 500 million in government subsidies.
As for Dubai's third largest Middle East-based company Emirates, no recent report has been issued, but the association said the United Arab Emirates has provided more than USD 26 billion in subsidies to the two companies until the Date, while Qatar has provided a similar A Qatar Airways.
"Like its Gulf buddies, Emirates uses billions of dollars in subsidies that break the rules to distort the international aviation market and fly unprofitable routes that just do not make any sense," Zuckman said. A month ago, the association said its accountants had found a similar pattern of reported benefits combined with unreported losses and subsidies on Qatar Airways.
