The CEO of Emirates Now Leases Planes To American Airlines

When Delta, United, and American rolled out their campaign against the ‘big 3’ Mideast airlines Emirates, Etihad, and Qatar five years ago they argued that airline subsidies were unfair. They said they couldn’t compete against governments, even though most of us assume the DMV would make the worst competitor in a customer service business rather than an insurmountable one.

Now that airlines have been getting direct subsidies from the U.S. government during the pandemic, and they’re on the cusp of more, they no longer oppose airline subsidies.

One of the arguments they deployed during their campaign against Mideast airlines, though, is that the Gulf carriers weren’t just subsidized by their governments but their fortunes were too intertwined with those of the state. They pointed out that the CEO of Emirates, Sheikh Ahmed bin Saeed Al Maktoum, is a member of Dubai’s ruling family and in addition to founding the airline also serves as President of the Dubai Civil Aviation Authority.

How much was American Airlines really troubled by Sheikh Al Maktoum’s hands being in so many different aviation pies? Not very much, apparently, because Dubai Aerospace Enterprise has delivered a leased Boeing 737 MAX to American Airlines. It’s “the first of 18 737 Max 8s acquired under a sale & leaseback (SLB) deal”

Sheikh Al Maktoum owns Dubai Aerospace Enterprise. In effect, Emirates now leases aircraft to American Airlines. What a strange world.

Politics isn’t about policy, it’s about raising the status levels of your group compared to other groups and it’s about gaining private advantage over others using the language of public good. It’s performative – Republicans care about voting for spending cuts, not cutting spending. Democrats care about making Republicans vote for tax increases (and rolling back Republican ‘wins’) more than raising taxes. Put another way most politics is fake.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. US carriers are opposed to the Mideast carriers not because they receive subsidies but because they offer so much better service that AA, UA, DL wouldn’t have any international business if these airlines could get more slots in the US. Doesn’t bother me in the least that they receive subsidies. Look at all the money the US carriers have sucked out of the taxpayer’s pocket and then treat us like garbage. They should open the domestic routes to all carriers and get some decent service in the industry again. Gary you are correct in your assessment on politics. Also as Americans complain about China products they flock to WalMart and Amazon and the vast majority of their products come from…………………………….China! AA leasing planes from Emirates is just another display of the double standard applied by corporate america. Almost as bad as the F/A’s claiming that “we are here for your safety” nonsense.

  2. I have no problem agreeing that U.S. carries’ gripes are insincere and have everything to do with competition and nothing at all to do with anything else, but to say that leasing planes from DAE is “in effect” leasing them from Emirates is quite a stretch. Its almost like saying getting your plane repaired from HAECO is like getting it repaired by Cathay Pacific because they have some of the same shareholders.

  3. Considering what you call Republican “wins” normally involve disenfranchisement of a particular group, I don’t see what’s wrong with that. Or would you rather the Republicans gerrymander the country and spread lies so as to stay in power indefinitely

  4. Gary, I’m not at liberty to provide details, and hardly know all of them myself, but you are way out of your league pretty much every time you comment on the way the Middle East airlines operate.

  5. @Gary Leff – As you can imagine this is a very sensitive topic given how intertwined major businesses in many middle eastern countries are with their governments and their royal families. I can’t really say more, though I will say that on this particular post, just because Sheikh Ahmed is CEO of EK, which AA is alleging benefits from government subsidies, doesn’t mean that AA is being hypocritical by accepting aircraft financing on favorable terms from another company in which Sheikh Ahmed has an interest. I just don’t see the connection; well, I see the connection — Sheikh Ahmed — but I don’t see why that’s such a big deal. To do any business at all in the UAE means that you almost certainly are doing business with the Al Maktoum family in Dubai and/or the Al Nahyan family in Abu Dhabi. Perhaps Sheikh Ahmed is trying to curry favor by offering favorable terms, or perhaps this is just a good deal for both companies. Either way, aircraft acquisition and finance are such a major factor for AA’s business that it makes no sense for them to turn down a favorable deal.

    (I also have objected to your suggestions in the past that “a rich sheikh’s ego” has played a role in failed efforts to merge EY and EK, which completely fails to understand the local dynamics as well as the considerable impacts on the local economies of Abu Dhabi and Dubai, well beyond just the profitability (or lack thereof), that these airlines have.)

  6. Mr. Leff, I am “surprised” that you ask Ian of what he is referencing. You have
    some nerve to ask such a question………( To those who do not understand
    sarcasm. )

    Ian “forgot” to mention what his background is, so that your readers can decide, if he knows anything of consequence not already in the public’s knowledge.

  7. @Ian – “I just don’t see the connection; well, I see the connection — Sheikh Ahmed — but I don’t see why that’s such a big deal.”

    The allegation of American, Delta, and United lobbyists wasn’t just that subsidies were problem but that the integration of aviation and government functions was a problem. They specifically complained about the role of the Emirates CEO in his airline and in aviation regulation, but this member of the ruling family also is a lessor who is intertwined with… American Airlines.

    You claimed I’m “out of [my] league” discussing this but I’ll ask again, what in this post is inaccurate?

    Mischaracterizing my position on another issue in Mideast aviation that has nothing to do with American Airlines doesn’t really answer that question. I haven’t suggested the only reason for lack of a merger between EY and EK is ego. I’ve said that ego can get in the way of finding a solution to these two carriers competing against each other and harming both.

  8. @Gary Leff – Sorry, I have to be so cryptic. But there’s a big difference between AA being “intertwined” by means of an arms-length business relationship and the intertwined nature of business ownership in the middle east. Note that I am not alleging bad faith or malfeasance on anyone’s part — neither the royal family nor AA — as I don’t have any information to draw a conclusion one way or the other. But I do believe that most of your posts about the situation demonstrate a weak understanding of the situation. I know that sounds harsh, but it’s not something you’re going to pick up by casually perusing media reports on the situation. I’m sure my response is unsatisfying, and I’m sorry about that.

    @Sunne – Take your sarcasm and shove it up your ass. I don’t owe you any explanation. I understand I’m just a random person on the internet. But you could choose to try to learn something about a part of the world I suspect you know nothing about (I don’t know for sure; like me, you’re just a random person on the internet), or you can gleefully and smugly post crap in a failed effort to make yourself look smart.

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