Monday, August 3, 2015

Did Etihad Airways Receive Subsidies?

No according to a former CEO of MK who works for the Gulf airline. Yes according to a group of American airlines who put governmental help dished out to Emirates, Qatar Airways and Etihad at $42 billion. Essentially by adding interest-free loans, capital injections, benefits of government guarantees, absorption of fuel-hedging losses and low airport charges.

A couple of months ago The Wall Street Journal mentioned that Eithad had sent a report to the US authorities acknowledging help of a little over $14 billion from its government. Some of that help was reported by the Australian Financial Review back in May 2014.

So I guess -- for our national strategic interest -- we should be very careful not to get mesmerized a bit too quickly. Air Mauritius has a brilliant future if it is allowed to operate on strong bases of meritocracy.


Anonymous said...

One must add the extremely low cost of fuel and low taxes. Taxes (paid on the ticket) add somme 25-50% to the cost of the ticket. Fuel costs can go up to 50% of the total costs. These are on top of the subsidies as you rightly mentioned....

Sanjay Jagatsingh said...

Which airline clocks the most international passenger miles? No, it's not BA.

Etihad Airways carried more than three times the number of passengers that fly Turkish Airlines. T/F?

Which airline owns 49% of Alitalia which recently filed for bankruptcy? Could it be Cathay Pacific?

What does the mix of plane orders tell us about where airlines think we're heading?

Answers in this excellent article.