United Airlines President Says Emirates Tests U.S. With Money-Losing Athens-Newark Flight

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

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

The route was announced on Jan. 23, three days after Donald Trump took office as president. Newark is a United hub.

While the big three U.S. carriers – American, Delta, and United – have battled rapid U.S. expansion by subsidized Middle East carriers Emirates, Etihad and Qatar, they are particularly troubled by Emirates’ two fifth freedom flights: Athens-Newark and Milan-Kennedy.

Under aviation law, fifth freedom flights serve two foreign countries.

Emirates. the United Arab Emirates airline owned by the government of Dubai, began Milan-JFK in 2012. “That one route was in place for a long time, then the election happened and Emirates started {Athens-Newark},” Kirby said.

 For United, he said, “This isn’t just about Newark-Athens, it’s about our entire international franchise. If Emirates can come in and lose significant amounts of money, and the {Dubai} government will make up their losses, it’s not fair competition. {And} if they’re allowed to fly this route, there will be more to come.

“We can compete on a level playing field with any airline in the world, but we can’t compete with subsidized airlines,” Kirby said. “It’s no different than dumping steel or dumping tires. You’re selling below costs.”

Such competition typically results in lost U.S. jobs. “You see what happens to jobs around the country, when { U.S.} companies compete with subsidized competition,” Kirby said. “We don’t want that to happen in the airline industry.”

United serves Newark-Athens seasonally, operating this year between May 24 and early October.

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.

A report by the Partnership for Fair and Open Skies, which represents the big three U.S. carriers and most of their unions, says government subsidies to the three Mideast carriers has totaled about $50 billion.

Subsidies violate the Open Skies treaties that allow foreign airlines to serve the United States.

As for Emirates, the most successful of the Gulf carriers, it has received at least $5 billion in subsidies since 2004, the report said. In 2015, Emirates President Tim Clark said the charge that subsidies support Emirates is “tosh.” Tosh is a British word for nonsense.

Kirby said it is laughable to say that Emirates is not subsidized – so laughable, he said, that “I cannot respond.”
Originally Published on Forbes.