Australia has awarded Etihad Airways rights to launch a daily service, complicating the long-standing campaign of Emirates to win more Australian rights.
Overcoming stiff resistance from Qantas, Emirates has successfully persuaded the Australian government to schedule bilateral talks with the United Arab Emirates (UAE) for March.
In anticipation of the talks, the UAE government asked the Australian government to increase the four weekly frequencies that Etihad now holds, but does not use. Australia upped them to daily frequencies.
Etihad is now in negotiations with Australian airports and is expected to soon disclose its launch plans.
Australian James Hogan, former chief executive of Gulf Air, switched to Abu Dhabi-based Etihad last year to guide its goal of becoming a major international airline. Some are questioning how much of Etihad's growth will come at the expense of Dubai-based Emirates.
Dubai is one of seven emirates in the UAE and until now many countries were willing to negotiate air service agreements as if Dubai were autonomous. But Emirates is losing its monopoly on UAE air rights with the emergence of Etihad, owned by Abu Dhabi, another emirate that also happens to be the capital of the UAE.
It is undecided whether in March the UAE government will negotiate on behalf of both emirates, or if Dubai and Abu Dhabi will work out separate deals for their separate airlines and then combine both into a single accord.
The current Australia-UAE bilateral was last revised in 1998 and last amended in 2001. Rather than another short-term amendment, Emirates wants a new accord that would cover the next decade.
Source: Airline Business
