Emirates airline vows "sledgehammer" reply to U.S. subsidy allegations

DUBAI, May 5 (Reuters) - Dubai carrier Emirates will deliver a “sledgehammer” response to a report compiled by U.S. carriers accusing major Gulf airlines of receiving more than $40 billion in unfair government subsidies, its president Tim Clark said on Tuesday.

“Having read the report, you could drive a bulldozer through just about everything ... We will deal a sledgehammer to that report as far as Emirates and Dubai is concerned,” Clark said at a conference in Dubai.

Clark did not say when any formal response would be delivered, but the airline’s CEO Sheikh Ahmed Al Maktoum told reporters in Dubai it would be fair if it had two years to put together a reply since the U.S. carriers took that long to produce their report.

Clark, who previously said he would resign if the report proved accurate, invited the heads of the three U.S. carriers making the accusations to follow suit if they are disproved.

“If you are wrong, and we show you to be wrong ... will you resign? What will do when this rebuttal comes back at you and shows the political entities that you’ve managed to orchestrate to come behind you that you are fundamentally wrong?”

Delta Air Lines, American Airlines and United Airlines alleged in January that Emirates, Etihad Airways and Qatar Airways received more $40 billion in state subsidies in the last decade, allowing them to drive down ticket prices and push competitors out of key markets.

More than 250 members of Congress signed a letter urging the U.S. departments of state and transportation to seek consultations with Qatar and the United Arab Emirates over the allegations.

Clark said the argument of stealing market share was weak as many of the destinations in the Middle East, Africa and Asia were minimally served by U.S. carriers.

“We have never been subsidised. We have never received from the government of Dubai any kind of ... special treatment,” Clark said, adding that the airline’s growth had been achieved without state intervention or state funding but instead came from its own cash flow, debt issuance and earnings.

The airline has also played up its purchases from U.S. and European manufacturers, such as last month’s $9.2 billion engines order from Rolls-Royce. (Editing by David Holmes)