Open your accounts, Air France urges Emirates

29th October 2004, Comments 0 comments

CANNES, France, Oct 29 (AFP) - The head of Air France-KLM hurled a challenge here Friday to the profitable airline Emirates, urging the Dubai-based carrier to open its accounts to see if they are based on fair competition principles.

CANNES, France, Oct 29 (AFP) - The head of Air France-KLM hurled a challenge here Friday to the profitable airline Emirates, urging the Dubai-based carrier to open its accounts to see if they are based on fair competition principles.

Air France-KLM chief executive Jean-Cyril Spinetta, speaking at the Cannes Airlines Forum, said he was not contesting remarks made here earlier in the day by Emirates chief director Timothy Clark, who denied that Emirates receives either government subsidies or privileged access to oil markets.

"I am simply asking him if if he would agree, so that we all could gain from the quality of what he has done, to open all his accounts ... to a mission from Air France-KLM," Spinetta said.

He added that he wanted "to understand the model and how it operates."

Spinetta heads a carrier that benefitted from a controversial government rescue in 1994 and which has been accused by British low-cost airline easyJet of throwing up barriers to effective competition in the French network.

Clark had earlier told the gathering: "It has been claimed, in several arenas, that Emirates has no need to join alliances, no desire to reduce costs, or even turn out a profit as it is protected and subsidised by the government of Dubai.

"I have heard those arguments and quite frankly they don't wash."

He appeared to be responding to comments from Spinetta, who during last year's Cannes forum expressed concern about airlines that have no domestic market to serve and generate traffic at points far from their hub.

He said he hoped such companies would continue to be managed according to market-based economic principles "and not according to other principles." Clark on Friday argued that "Emirates receives not one iota of government subsidy."

"Emirates also does not receive cheap or free fuel, nor does it have a bottomless pit of capital as some seem to think."

He said that when the carrier was established in 1985, the government "gave us USD 10 million in cash and told us not to come back for more."

"Since those early days there has been no additional financial input from the government."

Emirates, which as is true with other Dubai-based companies pays no corporate taxes, reported a record USD 476 million in net earnings in fiscal year 2003-2004, up 67 percent from the previous fiscal period despite the war on Iraq and the SARS epidemic in Asia.

It serves 77 destinations in 54 countries with a fleet of 71 aircraft.

© AFP

Subject: French News

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