An ongoing dispute between Aeroméxico and Emirates over the Gulf carrier’s plans to launch a new service from Dubai to Mexico City via Barcelona is only intensifying. Aeroméxico has cried foul over Emirates’ plans to enter the Mexican market, accusing the airline of having an unfair competitive advantage. Meanwhile, Emirates remains determined on its plans and is already selling tickets on the new route despite not having the required permits or slots to operate in Mexico.
Aeroméxico was not particularly happy when early in 2018 Emirates received the go-ahead from Spanish and Mexican authorities to launch a new daily service between Barcelona and Mexico City. The flag carrier stepped in, pressuring the country’s regulators to deny Emirates approval for a daily service.
The Gulf airline withdrew its request to fly the route in September 2018, as authorities only granted it permission to operate three flights per week, according to Mexican newspaper El Universal.
Thrice weekly service is what Aeroméxico planned for its Barcelona – Mexico City route that was to be launched in November 2018. The national airline suspended the plans in May 2018, after fifth freedom rights were granted to Emirates by regulators, local newspaper Expansiόn reported at the time.
After the back and forth dealings of last year, in July 2019, the Dubai-based carrier officially announced it is planning to launch the daily service starting December 9, 2019.
In efforts to prevent the Gulf carrier from entering the market, this time, Aeroméxico took legal action, urging the Mexican government to reverse a decision that allows Emirates to exercise fifth freedom rights on the route.
The airline also did not wait to launch its previously intended three weekly services between Mexico City and Barcelona and soon declared it will be bolstering the route with six daily services scheduled to begin in March 2020.
This came after Aeroméxico was forced to cancel five routes as a result of the grounding of the Boeing 737 MAX. The carrier is also cutting several other routes, including its three times weekly Mexico City – Tijuana – Shanghai service, which will be discontinued in mid-December 2019.
Aeroméxico reportedly cancelled the route so that it could increase flights to Barcelona and be able to compete with Emirates’ new offering. “We’re cancelling the Shanghai operation to strengthen our Barcelona flights,” Aeroméxico’s CEO Andrés Conesa was quoted as saying by Routes Online.
Explaining further the company’s decision to increase its Barcelona route frequency, Conesa stated:
“We have decided to increase our operation to a daily service. First, because we have seen strong demand on the route, but also in response to the government’s disappointing decision to grant Emirates fifth-freedom rights to fly from Dubai to Barcelona and Mexico City, in spite of the subsidies that Emirates receives from the government of the United Arab Emirates,” the chief executive was quoted as saying by El Universal.
“We believe that it is not fair, that it is not the right policy and we will do everything in our power, including taking legal action, so that it does not happen,” Contesa remarked, adding that, ‘‘Giving fifth freedom flights on a route that is served by a national carrier has never happened before.”
(Un)fair competition
Emirates maintains that the new flight services between Spain and Mexico will “cater to underserved demand”. According to Emirates President Tim Clark remark in an official press release on July 16, 2019, the carrier’s direct connection between the Spanish city and Mexican capital is a route “that has long been neglected by other airlines and remains underserved despite the strong customer demand”.
In opposition to Emirates, Aeroméxico’s main argument has always been about a level playing field. The airline has reiterated allegations that the Dubai-based carrier is receiving illegal subsidies and therefore has an unfair competitive advantage over the national airline.
Although Aeroméxico’s chief had stressed that the company was “not afraid of competition”, he also stated that it “cannot compete with an airline that receives billions of dollars in subsidies,” Expansiόn quoted him as saying.
Unfortunately for Emirates, its efforts to obtain regulatory approvals for the new route came at a time when, in 2018, a long-lasting dispute between U.S. legacy carriers and the Middle East big three had reignited.
American, United and Delta have long accused Qatar Airways, Emirates and Etihad of receiving government subsidies, which are in direct violation of the “fair competition” stipulated by the Open Skies agreements with the United States. Aeroméxico‘s has a long history with Delta Air Lines, which owns a 32% stake in the flag carrier.
Careful what you… accuse of
Early in August 2019, Aeroméxico filed an appeal before the Ministry of Communications and Transportation (SCT) against the allocation of landing slots, required by Emirates, and the permission to conduct fifth freedom fights on the announced route.
The flag carrier also pointed to the omission of the Federal Commission for Economic Competition (COFECE) in the process to determine whether the entry of Emirates would violate fair competition rules, according to a report by A21.mx on August 26, 2019.
In addition, Emirates has already launched ticket sales on the Dubai-Mexico route, which Aeroméxico’s CEO Andrés Conesa says is illegal because the airline does not yet have the regulatory approvals from Mexican authorities.
Emirates has finally fired back at the flag carrier, accusing Aeroméxico of creating a “public disinformation campaign” against the airline and by doing so, “denying Mexican customers competitive options and access into a drastically neglected markets”. These accusations, directed at Aeroméxico’s chief, were launched by President of Emirates Tim Clark in a statement on August 27, 2019.
“Since Emirates announced its plans to operate flights from Dubai to Mexico City via Barcelona; Andrés Conesa, CEO of Aeromexico, immediately launched a public disinformation campaign aimed at blocking the launch of the Emirates route planned for December 2019,” the statement is quoted by Infobae.com news website. The fact that Delta is Aeroméxico’s shareholder did not escape Clark either. Safe to say, punches have now been thrown by both sides.