Breaking America: How Gulf airlines are conquering the US
The new Emirates Jennifer Aniston advert is just the tip of the iceberg when it comes to a fierce row between Gulf and US airlines.Peter Iantorno October 6, 2015
Anyone who has seen the new Emirates advert starring Jennifer Aniston won’t be able to help but notice the sly dig the Dubai-based airline is taking at its American counterparts.
For those who haven’t seen it yet (watch it here), the advert features Hollywood favourite Aniston on an American airline that doesn’t have showers or a walk-up bar, only to wake up and find that it was actually a nightmare and she is in fact on a Emirates flight which, of course, does have those facilities.
It’s a smart advert – not least because the injection of humour is a departure from the usual formulaic approach airlines take with their advertising – but beyond the comedy is a much more serious point: Emirates is now in direct competition with the major US airlines.
In fact, the rivalry between US and Gulf airlines is one that has been simmering for some time, as in recent years the likes of Emirates, Qatar Airways and Abu Dhabi’s Etihad Airways have taken a huge chunk of the US aviation market.
Dubai is the most air-connected city on the planet and home to the busiest airport in the world. It is within a four-hour flight of a third of the world’s population, and within eight hours of two-thirds – and this is causing a big problem for US airlines.
There are now more than 250 flights per week leaving from Dubai, Abu Dhabi and Doha to 10 different cities throughout the US, and more are being added all the time. This means that travellers from Asia, Africa, the Middle East and Australia are using the Gulf countries as their stopover en route to the US, and conversely US travellers are stopping in the Gulf on their way to the other side of the world.
As well as the increased availability of the Gulf airlines, there is also the fact that they are consistently more affordable and provide a better service than their US counterparts. The disparity in quality is clearly visible from the results of the 2015 World Airline Awards, which saw Qatar come first, Emirates fifth and Etihad sixth, while the major US airlines Delta, United and American Airways came 45th, 60th and 79th respectively.
Fight or flight
Clearly the American airlines are struggling to compete with the competition from the rich Gulf countries, but this year has seen them launch an offensive of their own. In March, Delta, United and American released a 55-page document accusing Emirates, Etihad Airways and Qatar Airways of receiving $42 billion in government subsidies and unfair benefits.
The US airlines claim that the alleged subsidies are a violation of the US Open Skies agreement, which promotes a fair and free market for the airline industry. “This unprecedented level of support allows the Gulf airlines to operate not as businesses, as US airlines do, but as arms of their well-heeled predatory governments,” reads a statement on the Americans for Fair Skies website, set up to fight the case.
All three Gulf carriers reject the claims, and since the allegations (which are still being investigated), none have backed down, with Emirates especially adopting an aggressive strategy to moving into the US market.
Just two months after the allegations, in May this year, Emirates president Tim Clark came out fighting. "Expand further from European hubs into the US? Yes we might do that," he said when questioned about Emirates’ plans to expand on the Milan-to-New York flight it launched in 2013. "The kind of abuse we've been getting might cause us to do it. And after Milan, we can see how profitable it is. If the Danes or the Swedes were to come to us and say 'we haven't got enough flights into the US, would you consider it?' Yes we might do that too."
And it’s not just idle talk either, as earlier this month Emirates doubled its capacity to Boston, launching its second daily service from Dubai International to Boston Logan. “The new flight will create improved connections for passengers travelling from Dhaka, Kolkata and many other destinations throughout Africa, the GCC and Middle East via Dubai and onwards to the US,” said Hubert Frach, Emirates divisional senior vice president, commercial operations, west.
And while the likes of Emirates, Etihad and Qatar continue to ramp up services to the US, the American carriers are resting their hopes on Washington imposing restrictions on the Gulf airlines operating in the US – an outcome that is highly unlikely given the amount of money the Gulf brings into the country's economy.
So while the latest Emirates advert might seem like a bit of harmless fun, using one of America’s most-loved celebrities in Aniston is actually a calculated move not only to increase the profile and popularity of the airline in the US, but also to fly in the face of its rivals and fire another shot across the bows in a dispute that seems set to run and run.