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Politics

Amid Protests Emirates Touches Down in Newark via Athens

March 13, 2017

NEWARK, NJ – Emirates on Sunday commenced daily passenger service between Newark Liberty International Airport and Dubai International Airport, via Athens International Airport.

“This new route will connect America’s largest metropolitan area and Dubai through one of Europe’s great capitals,” said Hubert Frach, Divisional Senior Vice President, Commercial Operations West, Emirates.

Athens’ strong traffic volumes to/from the US, underpinned by the vibrant Greek-American community, signify the potential and the success of the route. We wish to our airline-partner all the best to this ground-breaking endeavor”, said Dr. Yiannis Paraschis, CEO, Athens International Airport.

At the same time, some 200 employees of Newark Liberty’s main carrier, United Airlines, gathered at the company’s behest inside Terminal B to protest the launch of service between Newark and Athens, Greece, by Emirates Airline, a state-owned airline of the United Arab Emirates, according to local media.

Last week, twenty-five members of the New York and New Jersey Congressional delegation sent a letter asking President Donald Trump to stop a Gulf-based airline from starting a roundtrip flight between Newark, New Jersey, and Athens this month, the latest salvo in a dispute over claims of unfair competition.

The letter released late Tuesday contends Emirates and other Gulf airlines have an unfair advantage over American air carriers because they receive billions in state subsidies, Associated Press reoprted.

“It is always a great pleasure to announce new air services, route expansions and partnerships at our airport,” said Diane Papaianni, the General Manager at Newark Liberty International Airport, accordin to Emirates press release.

“Emirates’ direct, year-round operations on the Athens-New York route is a spectacular development for the Athens’ market, enhancing its connectivity and presenting the traveling public with new travel options on Emirates’ excellent product.”, said Dr. Yiannis Paraschis, CEO, Athens International Airport.

“The United States is a priority market for Greece,” said Consul General of Greece in New York, Konstantinos Koutras. “Greece has experienced a double-digit increase in arrivals from the United States in the past two years. The establishment of the new direct flight Dubai-Athens-New York will significantly empower Greece’s appeal among the U.S. travel audience.”

United President Scott Kirby says Emirates will lose an estimated $25 million to $30 million annually on its Athens-Newark route.

Nevertheless, Emirates opened the route “to see what the U.S government will do,” Kirby said, in an interview to Forbes. “It feels like a test of the political will of the United States.”

The leading American airlines have said Emirates, Qatar Airways and Etihad Airways have received billions of dollars in subsidies from their governments, allowing them to offer below-market fares and violating so-called open-skies treaties.

They say that allows the Gulf carriers to offer below-market fares, which could force American carriers to discontinue some routes and cut jobs.

Tuesday’s letter estimated that “for every long-haul route lost or foregone as a result of subsidized Gulf carrier competition, more than 1,500 American jobs are lost.”

Some smaller U.S. airlines, and some consumer advocates, have taken a different view and say the competition would lead to lower fares generally.

American, Delta and United asked Washington to open negotiations with Qatar and the United Arab Emirates, but the Obama administration didn’t take action before leaving office.

Kirby said United makes money on the route in the summer, but in the winter, demand is limited to about 100 passengers a day. Yet Emirates will operate a Boeing 777 seating 354 passengers.

“If they got 100% of the market, which of course they won’t, that’s less than a third of the seats on the airplane,” Kirby said. “That’s evidence that they are not focused on profitability. They are just focused on flying the airplane somewhere and having the government subsidize it.”

Emirates could fill the airplane if it lowers fares sufficiently, but “If you’re doing that, you are still losing money,” Kirby said.

Emirates and other state-owned Gulf carriers deny accusations they focus on stripping market share and driving out competition.

U.S. carriers worry Emirates’ entry will pull down fares on routes to Athens, a seasonal, vacation-driven market. United and Delta Air Lines Inc. operate flights from the New York area to Athens during the summer; seasonal flights from American Airlines Group Inc., leave from Philadelphia.

Emirates said the Greek government asked it to add the route. Aegean Airlines SA, the Greek flag carrier, doesn’t fly to the U.S. at all, WSJ reports.

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