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Airlines battle 'one-sided' agreement with Emirates Add to ...

Ottawa's refusal to grant new Canadian landing rights to the United Arab Emirates and allegations that Persian Gulf carriers thrive on subsidies have irked the head of Dubai's airport, home to Emirates Airline.

Emirates, owned by the Dubai government, has been seeking to introduce flights to Calgary and Vancouver, as well as lobbying to gradually boost its Toronto service - currently limited to three round-trip flights a week between Dubai International Airport and Toronto's Pearson International Airport.

But after Ottawa recently refused to grant greater access to Dubai-based Emirates and Abu Dhabi-based Etihad Airways, the UAE served notice that it will evict the Canadian Forces from Camp Mirage, a Persian Gulf base that serves as a crucial jump-off point to Afghanistan.

Paul Griffiths, chief executive officer at Dubai Airports Co., fired back Wednesday at critics in Canada and Europe, where Air France is leading a group of European and U.S. carriers to voice concerns about expansion-minded Emirates receiving low-interest aircraft financing and other subsidies.

"The only thing Dubai is guilty of is providing an environment that actually supports aviation," Mr. Griffiths said in a statement. "Most governments around the world treat aviation as a pariah, choking its growth with costly, misdirected regulation, instead of adopting policies that recognize its considerable socio-economic benefits and support its sustainable growth. They then compound the problem with parasitic forms of taxation that usually flow straight out of the sector."

The Air Canada Pilots Association began publicly attacking Emirates in the spring of 2009. Last March, Montreal-based Air Canada launched a series of stinging critiques against Emirates. "Few Canadians actually travel to Dubai as a destination and fewer still residents of Dubai travel to Canada," Air Canada CEO Calin Rovinescu said in a recent speech in Montreal. "Simply put, it would be yet another defeat for Canada to adopt an unbalanced trade agreement with the UAE and allow for the dumping of seats into the Canadian market to siphon off profitable flying."

Emirates' growth strategy pits it against two Star Alliance partners, Air Canada and Germany's Deutsche Lufthansa AG, which rely on Frankfurt as a key European hub. Dubai serves as a stopover hub for most Emirates travellers to and from Canada, so the battle is over international connecting traffic between Canada and the Middle East, Africa and the South Asian subcontinent, industry observers say.

Emirates has been pushing for up to 50 new takeoff and landing slots over the long term, but Air Canada and Transport Canada oppose the distribution of so many new flights, saying there have to be "reciprocal" benefits, and not the one-sided advantages for the UAE.

Air Canada argues that Emirates doesn't really want to fly customers between Canada and Dubai, but instead sees the foreign carrier as aggressively seeking to skim off lucrative international traffic via the UAE.

"We want to have fair market conditions, and it's the Canadian government's call to judge and see if there are fair market conditions," Lufthansa spokesman Martin Riecken said Wednesday. "If there's a one-sided imbalance in the traffic rights situation, that is certainly not something we would support."

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