Emirates Airline, along with Etihad Airways and Qatar Airways, has found itself in the crosshairs of a campaign by American Airlines, Delta Air Lines and United Airlines, which say the Gulf carriers are supported by more than $40 billion of state subsidies and are not compliant with their countries’ Open Skies agreements with the US. Tim Clark, president of Dubai-based Emirates, is hitting back.

What is your response to the report commissioned by American, Delta and United that alleges Emirates, Etihad and Qatar Airways are receiving billions of dollars of state subsidies?

I think when any group or entity makes allegations, the least they can do is put that complaint in front of [those being accused] and invite a response. I don’t know in my aviation career or in any other walk of life where this kind of thing happens without that fairness. I’m surprised it’s been allowed to get as far as it has, without the carriers in question being invited to give a response. We have always been great advocates of fair competition. When somebody says we want fair competition, we at Emirates say ‘bring it on.’

Why do you think the three US carriers are doing this now?

That’s a mystery to me. And why they are doing it at this kind of level? It is disturbing. Suddenly, they burst on the scene and say ‘this is the truth.’ That’s not the way to behave. I understand it took two years to create this report. Who paid for this? The shareholders? How can you say this is the truth without allowing the balance of opinion or a response to come into play? All this strikes me as extraordinary. We’re reasonable people; we do not go out of our way to take down other carriers. We try to add value to the consumer proposition.

Do you think this dispute could lead to a change in the Open Skies agreements the US has with the UAE and Qatar?

I can think of 40 destinations that the US carriers do not serve and where we take business because American carriers don’t fly to those places. What is wrong with that? I would ask the US carriers why they don’t serve those places and what is their international long-haul philosophy? This is grossly unfair. Should the Open Skies agreements be closed down? That would be madness because they have done the US an enormous amount of economic good.

Explain the basis on which Emirates was started and how it operates.

I’ve been here since the beginning. We were given a clean sheet of paper and a $10 million check. We built this airline with blood, sweat and tears and faced enormous difficulties and took big risks. Emirates is profitable, cash positive, has built a formidable balance. Emirates does not receive subsidies. We will prove that. We have produced our financials since the early 1990s, and our competitors have had full and free access to those. Our business model wasn’t unique; what was unique was the geographical location of our [Dubai] hub.

Let’s talk about Emirates’ business in general. What’s happening with your network development?

We are at 231 aircraft in our fleet and growing. There are constraints at Dubai, but our hub has to move with us. It’s possible that by 2022-2023 Emirates can switch to the Dubai World Central Airport. Airspace has become a big issue and a high-level problem. The [UAE] government is addressing it as a top priority because these constraints are affecting both Emirates and [Abu Dhabi-based] Etihad.
We have a large number of cities that we wish to serve, and a large number of cities that want us to serve them.

You have 59 Airbus A380s in your fleet. You always say that aircraft is a money-maker.

What surprises our competitors is where we have put the A380s, into secondary and even tertiary markets. Many airports ask us to bring the A380; they have spent an awful lot of money adapting their facilities to A380 operations. Mauritius, for example, has a very forward-thinking government that wanted to bring in twice-daily A380 service with 1,000 seats to populate hotels that were previously half empty. That’s a smart thing to do.
We make good money from the A380—wherever it flies we have 85% to 95% load factors. We have 100 airports on our list of destinations that could be served with A380s.

So that’s why you are so keen to see a re-engined, more efficient A380neo developed?

The A380neo, should it be built, could give us an additional 10% to 13% reduction in seat costs. Provided Dubai grows at the pace we want it to, we would add more airplanes. Eventually we will have to replace 140 A380s [in the Emirates fleet or on order], and we probably need another 60. We will go into A380 replacement mode during a period between 2020 and 2030. We’ve had extensive discussions with Airbus on the A380neo and understand they are compiling the business case. I hope that carriers like Singapore Airlines or Qatar Airways will also step up and buy the A380neo.

There had been speculation that Airbus would end A380 production …

I think they’re of a mind now to continue production. Six months ago I was getting a bit alarmed and I reminded [Airbus] that we know this plane makes money and that it’s an icon for European aviation. It is one of the best things they’ve ever produced. To cancel it makes no sense politically or economically. The airline business is risk-averse generally; boards are risk-averse.

Emirates canceled its order for 70 Airbus A350 XWBs last year. Might you still be interested in that aircraft, or the Boeing 787, at some point?

We are looking at both: the A350, the 787-9 and -10. When we’re ready, we’ll do what we have to do, but the A350 is sold out until 2019. I’m sure they could insert us into certain [delivery-slot] availabilities. We clearly have room for a 250-300 seater. It might potentially be an order for 50 to 70 aircraft. It would also depend on Dubai’s hub growth and if we get into the new airport. A lot depends on that.

And you want to see how the A350 performs?

Sure, we would like to see how it operates. Then we can compare it with the 787-9 and the -10.