Turns Out the US Airline White Paper Trashing the Gulf Carriers Did Some Very Naughty Things

Dr. John Frankie O’Connell of Cranfield University is not happy with the white paper issued by US airlines arguing that Emirates, Etihad, and Qatar receive huge subsidies.

The paper cites his work, such as “The rise of the Arabian Gulf carriers: an insight into the business model of Emirates Airline,” Journal of Air Transport Management, and fabricates quotes.

[T]he white paper report on page 30 quotes from my report..in support of the alleged subsidization of Emirates Airline and its related managerial practices that “this multifaceted management role…can press the airport to act in the best interests of the country’s flag carrier.”

My academic paper reads directly as follows: “This multifaceted management role allows for cost synergies and pressurizes airports to act in the interests of airlines.” The passage quoted in the academic paper does NOT state the words can press the airport to act in the best interests of the country’s flag carrier”. The passage in question was referencing the fact that these lower landing charges are passed onto ALL airlines “to act in the interest of airlines”, (which was omitted) and how Emirates Airline and Dubai airport work together to induce synergies.

His research suggests that all airlines pay the same low landing fees in Dubai, with the airport deriving significant revenue from duty free sales — a common worldwide strategy but one that doesn’t reduce landing fees in countries where different entities control different revenue streams. The author of the paper cited by the US carriers finds this a legitimate strategy, and finds political processes in the US and UK lacking in comparison when it comes to airport expansion.

The white paper also addresses Emirates’ labor practices that he addresses in the work that the US airlines cite. He finds that when properly accounting for non-cash compensation paid to flight crew (e.g. housing, children’s education, healthcare) that Emirates’ labor costs are equivalent to those of Singapore Airlines.

Professor O’Connell concludes,

I believe that the US white paper report makes false claims on the arguments made by my paper. Lobbying in favor of a stakeholder is understandable in pluralistic modern societies. However, doing so by victimizing and blaming the success of others based on inaccurate statements is a practice of very limited added value to the society.

Take the claims in the US airlines’ self-interested report with skepticism.

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. Based on their previous work and press releases, this is hardly surprising.

    What an embarrassment.

  2. This is blog worthy? Regardless of the good doctor’s beliefs, the indisputable reality is that the fee structure of the Dubai Airport is set up to serve the “best interests of the flag carrier” because fees are levied on origin/destination passengers, and not connecting passengers. Only Emirates has connecting passengers. Convenient, no?

  3. Iahphx I see you’re still peddling the same old line and so called expert views on here like you did on flyer talk ek forum. In response to your point most airports don’t charge connecting passengers the fees for the connecting airport. But of course according to you that’s a conspiracy to take business away from the American flag carriers.

  4. Yes, it’s worthy to point out the US carriers changed the report , construing it to mean something that is the opposite of what it says. At least I find it interesting. It makes me less likely to believe anything they say.

  5. Agree with traderprofit. Misquoting is bush league stuff a 7th grader might try to pull. I’m sure there are other fabrications in the report.

  6. @iahphx – the point is that the US airlines fabricated quotes in their report. You don’t seem to approach this issue with an open mind, but are you really that willing to dismiss the fraud they appear to be perpetrating here?

  7. If you were a journalist or scientific researcher and you deliberately misquoted someone like that in order to buttress an argument, you very well could be looking for another job after that.

    Does that mean the whole report is similarly flawed? No. But it does cast a pall over it and now people are going to comb through it looking for similar mis-characterizations.

    You do come away from this wondering if the Big 3’s case against the ME 3 is so solid why did they feel the need to slant the report?

  8. Fraud? Really? Who would possibly care what an obscure professor from a college nobody’s ever heard of wrote? I’m sure it’s just an editing error.

    And, for the record, connecting passengers are exempt from Dubai Airport’s $22 departure fee which, obviously, is a subsidy for Emirates because only they have connecting passengers.

    What does matter, though is that more than 260 Congressmen and women just signed a letter demanding that the DOT crack down on the Middle East airlines’ clear abuse of the Open Skies treaty. Change is coming, whether Emirates’ apologists like it or not. BTW, the UAE itself might not be that unhappy about it, because the cost of continued uneconomic expansion to the USA would likely be hundreds of millions in additional annual losses.

  9. BTW, if anyone out there REALLY thinks that the Mideast airlines are actual commercial enterprises engaged in profit-seeking, check out this story about the decline of airfares in the UAE.

    http://www.thenational.ae/business/aviation/flight-prices-plunge-to-europe-and-north-america-as-cheap-oil-brings-down-fares

    Of course, it isn’t cheap fuel primarily bringing down fares (note that fares are only down slightly in the US and other developed nations) it’s the ridiculous over-capacity caused by Emirates, Etihad and Qatar all adding widebody aircraft at an unprecedented rate. No foreign airline can compete in a market with these kind of stats. Which is why they don’t, and why they’re asking the US gov’t to mandate some level of business rationality in the marketplace.

  10. Dear iahphx,

    Congratulations for being in a minority of one in the arguments you present here.

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