The President of Emirates Airline, Tim Clark, recently delivered a major speech on Emirates and the aviation industry to the European Aviation Club in Brussels. The speech focussed on the interests of consumers, with particular reference to alliances, consolidation, competition and liberalisation. Open Sky publishes key highlights of the speech on page three of this issue and the full text is available on our website.

David Robertson, a business correspondent with the Times of London and Emirates Business 24/7, said of the speech: “Is Clark right to so obviously link the massive aircraft orders that Emirates has made, which support thousands of manufacturing jobs across Europe, with Europe’s sometimes restrictive rules on access to its airports? Absolutely.”

He said, “One of the other issues Clark raised was the anti-competitive nature of airline consolidation and alliances. If two carriers operating the same route merge and competitors continue to be kept out by regulators, this reduces competition and inevitably prices go up. Clark’s comments were timely as just hours after his speech British Airways and Iberia, Spain’s flag carrier, announced plans to merge…The economic downturn has hit airlines hard and this has triggered a wave of consolidation with deals being waved through by regulators who do not want to be the cause of an airline going bust. ‘In our view, airline competition runs the risk of being the forgotten story of this recession and in to 2010’ said Clark.”

Emirates at the European Aviation Club

Issue 5 | December 2009

Most don’t believe it’s true. In 2009, could an international airline be singled out by a government agency and told to increase its fares to match competitor pricing on key routes? Wouldn’t that be illegal in much of the world? Incredibly such a policy is alive and well in the most unlikely of places: the developed, open and competitive G8 economy of Germany.

The German Federal Office for Goods Transport recently wrote to Emirates to instruct us on the issue of ‘price leadership’ for our business class fares on three international routes from Frankfurt to Johannesburg, Hamburg to Singapore and Berlin to Singapore. We were told that we must raise our fares immediately so that these aligned with certain other carriers, specifically two Star Alliance members. Given the scale of fines being threatened, Emirates had no choice but to adjust the tariffs in question. We did so under protest.

Emirates prices its tickets commercially, competitively and fairly for consumers in all markets we serve. How else have we remained profitable with a loyal customer base? Yet the German policy removes our ability to compete fairly with our one-stop service via Dubai against direct competitor services on these routes. We believe not only is this anti-competitive but that this selective and non-transparent tariff matching policy is not in the interests of German consumers.

In the case of Frankfurt to Johannesburg, our tariff was not even the lowest available fare offered by a non-EU carrier and the tariffs offered by British Airways, KLM and Air France were significantly less than Emirates. And none of these prices appeared to change after Emirates had adjusted our own tariffs. Could you imagine Mercedes asking government to force Lexus to increase its price to match the German car, and this being law?

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Forced to increase fares to match alliance carriers

As the climate change debate gathers pace, aviation finds itself centre-stage in the lead up to the next UNFCCC meeting in Copenhagen (COP15).

Having been left out of the 1997 Kyoto Protocol, the industry was left to find its own solution through the International Civil Aviation Organisation (ICAO). Many environmentalists and industry bodies have argued that not

enough has been achieved, despite ICAO’s own Group on International Aviation and Climate Change (GIACC) coming up with a proposal this year to deal with global aviation emissions.

After intense negotiations at ICAO’s recent High Level Meeting (HLM) in Montreal, this proposal was eventually endorsed by all Member States. The United Arab Emirates (UAE) played a key role in bridging the gap between opposing views of developed and developing countries.

Emirates supports the ICAO and IATA proposals for dealing with aviation emissions, including a global, sectoral approach and the setting of achievable, equitable targets for fuel efficiency and carbon-neutral growth. We also believe that fast-growing operators from rapidly developing economies should be recognised, as well as airlines that have already invested heavily in modern, fuel efficient fleets.

The aviation industry must be unified in its position. If not, the responsibility of dealing with this issue will be taken out of our hands, and given to the politicians, bureaucrats and environmental lobbyists. The result will be a complex, overlapping patchwork of regional trading schemes, taxes and levies - where industry and travellers will be forced to pay for emissions several times over - and where none of these funds will be invested back into aviation technology or biofuels research.

Flight path to Copenhagen

Connecting the unconnectedTravel in and out of Africa continues to be severely constrained and limited by a lack of connectivity. The inconvenience and additional cost to passengers are obvious, with itineraries to and from Africa via a point in Europe not uncommon.

We believe this precludes Africa from realising its full potential in terms of tourism, business travel and economic development. Emirates is fully committed to investing significantly across Africa. Recently we increased African services to the new destinations of Luanda, Angola and Durban, South Africa. We also announced an agreement at the Dubai Airshow between the Government of Senegal and the Emirates Group for the airline to support Senegal Airlines. This will include assistance in terms of technical expertise, training and aviation-related goods and services.

Emirates also recently did research into international flight options available for three African markets (excluding flights in the African continent) and compared them with what is available for travellers to and from Dubai. It showed more passengers chasing few flights for these African markets. Assuming that Dubai, with significantly more travel options, has a flight-passenger connectivity index of 1.00, the three African destinations have significantly lower connectivity indices.

Africa is a key market for Emirates. Starting with just three weekly services to Cairo in 1986, Emirates today serves 18 destinations in 15 African countries (including two freighter-only destinations), with 139 weekly frequencies, most on a non-stop basis. In 2009, Emirates added two new destinations, Durban in South Africa and Luanda in Angola.

The largest industry by far in the Maldives is tourism, which currently contributes almost 70% to GDP. The contribution of the travel and tourism economy to employment stood at 64,000 jobs in 2008.

Since aviation plays a vital role in the sustainable development ofmany small countries like the Maldives, their international accessibility isa key issue.

Starting with three weekly services in May 1987, Emirates now operates double daily flights, and is today one of 14 international carriers to operate scheduled services to Malé and provides connectivity to a wide range of other destinations over its Dubai hub. Between 2004/05 and 2008/09, Emirates’ passenger carriage between Dubai and Malé grew at 11% per annum - higher than the 3% growth in tourist arrival statistics into Maldives during the same period.

In 2008/09 Emirates carried approximately 4,500 tonnes of cargo between Dubai and the Maldives. In addition to injecting US$9.2 million in 2008/09

through direct expenditures and marketing spend in the Maldives, Emirates has spent significant sums on promoting the destination throughout its network. Emirates Holidays has also actively promoted Maldives as a tourist destination and in the last five years has sold more than 9,000 packages to Maldives.

Emirates passenger traffic to/from Malé

The aviation industry is concerned with the proposal of the Maldives for an additional emissions levy on international aviation. Known as the ‘Maldives Adaptation Levy’, the proposal calls for a levy up to US$62 on all international air tickets. This would create a US$10 billion per year fund that would be administered by the UNFCCC, and handed out to Less Developed Countries and Non-Governmental Organisations for climate change ‘adaptation’ projects.

The concern of the airline sector is the damage this mega tax will do to travel demand, that a vital industry and related sectors of tourism and trade will be targeted beyond our environmental impact and that aviation will suffer from an extraordinary duplication of taxes targeting the same issue.

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Casablanca Tripoli

Tunis

Addis Ababa

EldoretEntebbe

Dar es Salaam

Johannesburg

Cape Town

Lilongwe

Nairobi

LagosAccraAbidjan

Khartoum

Cairo

Dubai

Luanda

Durban

Countries MIDTbookings(October08-September09) Frequenciesoperatedperweek Connectivityindex Angola 516,953 37 0.30

Nigeria 1,393,017 120 0.39

Ivory Coast 263,286 25 0.43

Dubai 10,699,992 2,245 1.00

Maldives – tourism and taxation

Do German travellers pay more than their EU neighbours?

“Our model is to operate a high-quality airline and brand, flying a fuel and emission efficient fleet, offering travellers true value across a global network through our Dubai hub.

There are two ingredients, however, that stand out. I’m referring to our brand and our network. Valuable, successful airlines today are brands – Southwest is a strong domestic brand of value, Emirates is a strong global brand of high-quality. The power of brand in our sector cannot be overstated. Emirates, for example, invests in sporting franchises over some other forms of marketing because of the brand impact such partnerships can offer.

Given the worth of an airline’s brand, those that cherish its value do not hang their dirty laundry out for all to see… they do not wring their hands on a daily basis, talking down their business and talking up their woes. Negativity kills companies and there is stark evidence of this very approach seriously damaging once great airlines of the world. Emirates, which endures many of the same challenges as our competitors – as well as a few unique ones, after all we’ve had a few wars in our backyard in the past 20 years – is not in the business of pessimism. We believe in our brand and behave accordingly.

If an airline’s hub is its heart, then the coronary circulatory system is its network. While we constantly fine tune the network, and even very occasionally trim or remove unprofitable elements of it, our model is to utterly respect the interconnectiveness of a global platform.

I’m willing to confess to one advantage we enjoy over some competitors, namely geography. We are blessed at being able to fly non-stop to any

point in the world from our home. More of these far-flung cities have come online since my last visit here, such as Cape Town, San Francisco, Los Angeles and Guangzhou.

But it is how we have managed and integrated this network that is the key to this recipe. Aviation is the globalised world and air services helped to make the earth flat. Our model works because we don’t have a one-dimensional route network of traditional Atlantic or Pacific crossings, or just the Kangaroo route or focussing inside one region. Connecting Moscow to Durban, or Beijing to Luanda, or Hyderabad to LA, or Perth to Dubai, are some of the thousands of examples of the new world’s city pairs. Those that ignore this changing nature of travel do a great disservice to the man or woman in the street.

And those airlines that regularly slash elements of their networks, or play interference with capacity on vital corridors, are, in my view, in serious long-term trouble.

Dismantling a network under the stress of short-term pain – which I accept can often be acute in our industry – is nonetheless an anathema to Emirates. I’m constantly amazed by the approach of some who think a network is easy to reclaim after earlier culling in a weaker economic period. Of course you must act commercially, but short-term acts of panic on a critical airline asset is wrong in my humble view.

We believe our pursuit of carefully planned, globally-diverse growth will continue to pay dividends.”

Extracts from speech by Tim Clark to the European Aviation Club on 12 November 2009

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Half-year financial results Emirates Airline produced a net profit of US$205 million, for the first six months of the current financial year, compared to US$77 million in net profits for the same period in 2008 - with passenger seat factor averaging 77.5%. During this period the airline made an estimated direct contribution of AED10 billion (US$2.7 billion) and an estimated indirect contribution of AED14 billion (US$3.8 billion) to the UAE economy.

HH Sheikh Ahmed bin Saeed Al-Maktoum, Chairman and Chief Executive, Emirates Airline and Group said, “The months since the global meltdown

have really tested our mettle. While some say the green shoots of economy recovery are sprouting, we expect it will take at least another year or two, before demand for air transport and travel services starts picking up again.” The Airline Weekly comment on the results was, ‘‘Sure enough, Emirates took a big revenue hit from the economic downturn. But its formidable advantages in the areas of fleet efficiency, airport infrastructure, labour costs and geography remain intact. It also has a government, unlike many others, that recognises commercial aviation’s contribution to economic growth.’’

Following the intervention of the German Federal Office for Goods Transport to force Emirates to raise our fares to match certain Star Alliance carriers (see page one), Open Sky has examined the overall state of fares in the German aviation market.

Our analysis of business and economy tariffs on direct services to various long-haul destinations from EU hub/gateway airports by their ‘home’ carriers, suggests that as a consequence of some current German policies, Lufthansa’s own fares ex Frankfurt are being maintained at artificially high levels. They are often the highest in the market by a large margin - something which is clearly to the detriment of German travellers and the German economy. The following tables highlight some examples.

To Tokyo EconomyFares(¤) BusinessFares(¤) Lufthansa 638 Lufthansa 4,575

Japan Airlines 570 Air France 3,240

Air France 550 Japan Airlines 2,974

British Airways 513 British Airways 2,757

Virgin Atlantic 513 Virgin Atlantic 2,757

KLM 294 KLM 2,450

To San Francisco EconomyFares(¤) BusinessFares(¤) Lufthansa 369 Lufthansa 4,907

KLM 349 Virgin Atlantic 3,595

Virgin Atlantic 253 American Airlines 3,481

American Airlines 242 British Airways 2,799

Air France 190 KLM 2,263

British Airways 156 Air France 1,828

Source: August 2009, GDS displayed comparable discounted tariffs

Fares on direct services to selected destinations from each airline’s EU hub/gateway airport

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The liberalisation debate in IndiaThe formula is not unique. A legacy flag carrier experiencing significant challenges in a downturn, coupled with their historic reform challenges. A progressive, liberalising government pursues more open skies. A minority try to connect the two as related, arguing competition is the root of a legacy carrier’s problems.

Like Australia, Canada, France and Germany over the past decade, India too is in the midst of a debate on airline protectionism, competition and legacy carriers.

In response, the Indian Minister of State for Civil Aviation Praful Patel recently said in the Indian Parliament that “liberalisation in international services benefits the national economy as a whole with the tourism and commerce sectors and addresses the need of a large NRI population working overseas. Also, liberal exchange of traffic has helped in adding capacity on international routes for benefit of the travelling people and also opening up commercial opportunities for Indian carriers.”

Considering Emirates is one of the largest carriers operating to and from India, we think it is important to inject evidence into this debate, including:

India became the main trading partner of Dubai in the first half of 2008, with exports from both India and Dubai totalling US$2.26 billion in the first six months of 2008. Passenger traffic between Dubai and India doubled between 2005 and 2008. Almost five million Indians travelled through Dubai International Airport in 2008. Indians in Dubai were responsible for US$30 billion worth of remittances to India in 2008. The UAE is India’s third largest trading partner with more than US$29 billion in bilateral trade and US$4.5 billion of investments in different sectors of the Indian economy.

Minister Patel also said that bilaterals are a “part of an on-going process, depending upon traffic demand, balance of benefit to Indian carriers, overall interest of Indian economy together with diplomatic and political considerations. These agreements are based on the principles of sovereignties of nations and reciprocity, in which a balance of opportunities and benefits are paramount.”

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There are now five Indian carriers flying between India and Dubai with a total of 157 frequencies per week and connecting Dubai to 18 points in India. Emirates operations have moved from 10 weekly frequencies to two Indian points in October 1985, to 175 weekly frequencies to 10 Indian points today.

Japan is clearly demonstrating signs of significant liberalisation for one of the world’s largest and most important aviation markets.

The extension of Runway B at Narita will add 20,000 (10%) slots from April 2010, while the expansion of Haneda Airport involves a new fourth runway which will add 110,000 daytime slots (between 0600 to 2300 hours) and an additional 30,000 early morning/late night slots.

Japan has also relaxed its strict procedures requiring an airline to use a pre-designated runway at Narita. In addition, a recent and widely reported

statement made by Japanese Transport Minister Maehara to transform Haneda into a hub airport suggests that a major new aviation policy is on the horizon.

Since Narita Airport opened in 1978, Haneda Airport was mainly used for domestic and chartered flights, while international flights were given access to Narita Airport on a limited basis owing to infrastructure constraints at the airport.

Whilst the previous Japanese government promoted deregulation in a progressive manner, the recent announcement has prompted strong interest among all those who advocate liberalisation. A recent report by the Centre for Asia Pacific Aviation anticipates that many factors such as the economic downturn in Japan, new ruling party, negotiations for an open skies agreement with US, additional capacity at Tokyo airports and Japan Airlines’ financial crisis provide a unique opportunity to the new Japanese government for a change that will set future direction of the North Asian aviation market.

North Asia in general and Japan in particular hold huge potential for growth in aviation and the announced initiative would open up many opportunities and stimulate growth in the travel and tourism sectors in Japan.

Emirates, the first Gulf-based carrier to serve Japan, has been operating to Kansai since 2002. Recently, we were granted access to Narita with a limited number of flights and from 28 March 2010, Emirates plans to operate five non-stop services per week - in addition to our existing daily non-stop services to Kansai.

Dawn of a new era in Japan

5

Tourism Australia’s (TA) recent submission to the Australian Competition& Consumer Commission (ACCC) highlights that the tourism sector couldbe the big loser from airline consolidation and the growing influence ofalliances. In its submission TA said that, “less competition between market players may (result in) reduced advertising/marketing. Tourism is highly reliant on marketing of the route by market players.”

Emirates own analysis of recent commercial agreements and applications for anti-trust exemptions highlights two negative impacts for the tourism industry:

Revenue and capacity sharing removes the positive competitive and commercial tension from route pricing. Ultimately the result is dominance for the alliances or those regulated to fly the route and higher fares, pricing marginal travellers out of the market; and Overall reduction of destination advertising and marketing designed to attract marginal travellers.

Tourism Australia also made the point that, “overall seat capacity is important, not who the passenger flies with.”

Tied in with the issue of expanding competition, Emirates recently announced the launch of a third wave of co-operative advertising with Tourism Australia. The GB£2 million campaign across the UK is designed to stimulate demand for Australia as a destination, which has been hit hard by the economic downturn. Over the past year, Emirates has invested over GB£3.5 million in advertising in the UK, boosting Tourism Australia’s ‘Come

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walkabout’ campaign - also matching this advertising commitment with tactical fare specials to entice marginal travellers down under. This is one of the many stimulus initiatives Emirates is making with tourism authorities across our network to boost demand.

Competition in the skies – positive boost for tourism

Australia’s first luxury conservation-based resort, Wolgan Valley Resort & Spa, welcomed its first guests in October.

The resort’s footprint is just 2% of the 4,000-acre site and delivers a truly unique Australian experience. Bordering the Blue Mountains World Heritage Site area, a conservation and biodiversity programme sits at the heart of the project. Conservationists have spent the past two years removing feral animals and noxious weeds from the former farming site. The conservation team has rehabilitated the land and is reintroducing only indigenous flora and fauna to the area.

The pre-historic Wollemi pine had been hidden from view for thousands of years and was recently re-discovered in the area. This is now a symbol of the resort and over 100 have been planted onsite along with 50,000 native plants that have been planted throughout the resort. The development has been built to highest environmental standards and will be one of first such resorts in the world to have a carbon neutral certification. Delivering the ambitious project saw Emirates inject over AU$100 million into the

Greater Lithgow region and create 1,500 jobs during construction and almost 100 permanent positions post opening.

Emirates conservation investment

“The World Trade Organisation estimates that cutting trade barriers by one-third would add 613 billion dollars to the global economy…In the last 65 years, global trade has added an estimated one trillion dollars to the United States’ national income.

Numbers like these tell us something important: We need to stop looking at free trade as a political issue. Instead, we need to view trade as a practical issue: figuring out what works and what doesn’t and pursuing the right policies. There is no doubt in my mind that the path to economic prosperity extends over global trade routes. We in the airline-cargo industry have a unique perch from which to view the benefits of global trade…

One billion consumers are expected to rise into the middle class in Brazil, Russia, India and China in the next decade alone…Cordell Hull the great American statesman and friend of Latin America once said this, “When trade crosses borders, armies do not.”

This year, global trade is expected to fall by about 10%. Much of that is due to the poor economic conditions but a portion can be credited to trade restrictions. That’s the first time in more than 60 years that we’ve seen such declines. I’m sorry to say that we’re at a dangerous crossroads for global trade…

As business people and as political leaders we must speak out. We must make our case to politicians. And we must convince citizens that global trade grows jobs, builds prosperity and improves the everyday lives of our citizens.

…What really works to increase prosperity, create jobs and bind nations closer together is one thing: free-flowing global commerce. Letting the river of commerce flow down paths of least resistance. The future belongs to countries that reject the siren song of protectionism and work to remove the barriers to trade with other nations.”

ExtractsfromarecentspeechbyBobLekites,PresidentUPSAirlines–Lettheriverflow,tradingforglobalprosperity

The Premier of British Columbia hosted an open skies summit in Vancouver on 25 September. Over 300 people attended, including the Premier of Alberta, the Deputy Premier of Saskatchewan, a number of provincial and municipal politicians, and a host of airline, airport, tourism, business and consumer representatives.

With very few exceptions, the message delivered at the summit was loud and clear: the federal government either needs to start making real progress with open skies negotiations, or get out of the way of the large - and growing - list of provincial governments and other stakeholders who want more competition and choice for Canadians.

Emirates spoke at the event and was cited repeatedly throughout the summit as an example of an airline wanting to increase service to Canada, but being denied that by Transport Canada:

Barry Rempel, Chairman of the Canadian Airports Council: ‘’Our position is clear. Open skies, period…But with many other countries around the world, our government is slow, reluctant or downright hostile to opening up market access. Singapore, the United Arab Emirates and Panama are examples of countries with whom we should have an open skies agreement, but we do not…There are air carriers banging on Canada’s door, practically begging to hire Canadians, help connect us to the world, and provide more choice to consumers. Often times, they want to provide service to parts of the world in which Canadian carriers haven’t the least bit of interest. But our government says ‘no.’ Why?”

The Honourable Gordon Campbell, Premier of British Columbia (pictured): “What do you hear in business today? You hear in business that it’s not just about the pieces of paper and it’s not just about the reports. It’s about the relationships you build. …And if I can say to a business person, ‘You know what, I can get you from here to Dubai in 12 hours, instead of here to Dubai in 20 hours’, that’s a benefit. It doesn’t just encourage our business people to go overseas and to build the international connections they want and the relationships they want. It encourages those international investors, those international businesses to come back here and build the relations here, in our country that we want.”

The Honourable Ed Stelmach, Premier of Alberta: “Since 2006, only eight open skies agreements have been signed by the federal

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government. The United States, on the other hand, has signed more than 90. These eight agreements have been with countries that, for the most part, don't represent key priority markets for Alberta from a tourism, trade and investment perspective. And they don't provide what we consider to be full open skies. …Alberta welcomed the Blue Sky policy when it was introduced in 2006. But progress has been very slow…Blue Sky's negotiation mandates are determined in secret. And its practices seem to ingrain protectionism, rather than eliminate it. We need to take a broader, more strategic approach that will improve the competitiveness of Canada's economy.’’

2009BritishColumbiaInternationalOpenSkiesSummit

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ViewsofthePremiersofBritishColumbia,AlbertaandSaskatchewanIn conjunction with the Open Skies Summit on 25 September, Premiers Campbell, Stelmach and Wall of British Columbia, Alberta and Saskatchewan, penned the following in Canada’s Globe and Mail newspaper:

‘’To meet our full economic potential, we need to expand international air service so airlines can have unencumbered access to our airports…

In today’s global economy, it simply doesn’t make sense to put needless restrictions on Canadian companies, or companies that want to work in Canada. While we acknowledge the work that the federal government has done to date, we can’t afford to rest.

We need to aggressively pursue more agreements. When countries and companies choose the United States instead of Canada because access and logistics are easier, it can be very difficult to get that business back…

Connection to the massive economies of Asia and the Pacific can mean an increase in trade of CA$230 billion for Canada by 2020 and hundreds of thousands of new jobs for Western Canada alone. We’ve been

working with Ottawa to build the infrastructure we need to support this growth - open-skies agreements with our key trading partners facilitate the movement of business people, investors and tourists, enhancing opportunities throughout Western Canada…

In fewer than 150 days, the world is coming to Canada for the 2010 Winter Olympics and Paralympic Games. The images and stories of our country will be broadcast to an audience of three billion people. Yet without open skies agreements, 90 per cent of the countries competing in the games will face restrictions on their ability to fly here.

Elected officials at every level, in every part of the country, are working hard to rebuild a strong and competitive economy and create jobs. Working together to push for open skies agreements makes sense. These agreements generate jobs, economic activity and investment. They reaffirm the West’s role as the gateway to North America, and they are an enormous economic potential.

Open skies agreements are simply the right thing to do in today’s interconnected, global, and open trade-based economy.’’

FromTheDailyMailnewspaperinUK,31October2009

Flight taxes hiked to bail out banks: It’s nothing to do with environment,saysDarlingFlight taxes are being raised to help bail out the banks, Alistair Darling admitted yesterday. In an extraordinary intervention, the Chancellor said the higher air passenger duty being introduced tomorrow was needed to plug gaps in the national finances. He made no attempt to justify the move - which will add GB£340 to the ticket for a family of four flying long haul - on environmental grounds, the official reason for the tax…Addressing journalists in Newcastle, home of the failed bank Northern Rock, Mr Darling said, ‘I am quite blunt about it, we need to raise money to pay for some of the things we have done…

Michelle Di Leo, director of the aviation lobbying group Flying Matters, said Mr Darling had ‘let the cat out of the bag on this flying stealth tax’. She added, ‘Just when the economy needs all the help it can get, he is imposing a tax which undermines job creation in the tourism sector, prices ordinary families out of flying and all for absolutely no environmental benefit. ‘When people realise how much this stealth tax will cost them and how much damage it is doing to the economy, any politician who commits to scrapping it will get an electoral boost.’

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UK Air Passenger Duty pushbackNovember saw the UK government introduce large increases in the ratesof Air Passenger Duty (APD) and bring in new banding levels based on theultimate destination of the passenger. In the lead up to this, there were many in the UK and elsewhere who questioned both the timing and the environmental rationale behind this move.

The Newcastle Journal newspaper spent a good deal of September and October highlighting the negative impact of the proposed hikes in APD for a wide cross-section of north eastern interests - including for local businesses, holidaymakers, the region’s universities and even for prospects of the North East’s economic recovery. Headlines such as ‘’They’re calling it a green tax - but it shows a red light to OUR exports, OUR holidays andOUR airports’’ leave little doubt regarding their editorial position.

In November and in the context of the ongoing debate into the valueof aviation, the Airport Operators Association (AoA) in the UK releaseda report from Oxera into the wider contribution of aviation to the UKeconomy. It demonstrated that the aviation sector and its supply chainmake a significant contribution to the UK’s economic output (GB£18.4billion gross value added), employment generated (234,000 jobs) and viatax contribution to the Exchequer (GB£4.8 billion and an additional £3billion via its supply chain).

Australian tourism APD concernsThe Australian Tourism Export Council (ATEC) said that the new departure tax arrangements were a retrograde development for the local inbound tourism industry which is currently struggling from the effects of the global financial crisis.

ATEC Managing Director Matt Hingerty said, “This APD is a total reversal of the free trade rhetoric recently promoted by the G20 group of nations as a measure to alleviate the current crisis…We believe that the climate

change debate is being used to disguise this protectionist departure tax in ‘greenwash’…Our local tourism industry, which employs nearly 500,000 people, can ill-afford additional taxes of this nature at this time. ATEC believes that this new charge will significantly impact travel to Australia from the United Kingdom, and is a critical trade barrier between the UK and Australia, New Zealand and the Pacific.” Mr Hingerty also urged the Australian Government to maintain its opposition to the APD and continue to pressure the UK government to reverse its protectionist behaviour.

Emirates Airline Foundation projects in Abidjan and ChennaiOn 28 September a team from Smile Train Italia consisting of 16 medical volunteers travelled to Abidjan and provided almost 100 children with free medical evaluations and reconstructive surgery. At the same time the team trained local surgeons, anaesthesiologists and nurses.

On 20 October a new home opened, funded by the Emirates Airline Foundation for abandoned HIV+ children in the Indian city of Chennai. Replacing the rented villas previously used by a non-governmental organisation, the Emirates-CHES Home has dormitories, a medical care centre, an indoor recreation centre, a swimming pool and an education centre. The foundation will also fund its running costs for the next 20 years.

Monday September 21 2009 | www.journallive.co.uk | 50p

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How another sneakytax rise will hit youin the pocketand damagethe prosperityof the region

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THE Journal is today launching anappeal to the Government to scrapplans for new taxes which threatento have a devastating impact on the

regional economy.Air Passenger Duty is set to rise twice in the

next 14 months – meaning it will be four times ashigh as it was just three years ago.

That means the prices of holidays abroad willgo up, while the prosperity of the region’sairports will be threatened.

And exports – on which theNorth so heavily relies – couldalso be badly hit by the rises,which we say are a tax too far.

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8Andrew J Parker - Senior Vice President Public Affairs, International Affairs, Industry

Affairs, Environment Affairs. Email: andrew.parker@emirates.com

Will Löfberg - Manager Public and Government Affairs

Email: will.lofberg@emirates.coms or piiea@emirates.com

Fast facts• Aircraft in fleet 140

• Number of destinations (passenger and cargo) 101

• Passengers (2008) 24.5 million

• Seat factor (2008) 78%

• Cargo (2008) 1.4 million tonnes

• Daily departures from Dubai International Airport 159

• Longest flight Dubai - Los Angeles (16 hours 35 minutes)

• Shortest flight Muscat - Dubai (50 minutes)

• First flight 25 October 1985

• Employees (Airline) 28,518

• Nationalities in workforce 152

• Financials 08/09 (Airline) Revenue US$12 billion, Net profit US$268 million

Venice

Newcastle

Toronto

Toledo Zaragoza

Casablanca

Paris

Nice

Athens

Rome

Moscow

SeoulBeijing

Osaka

Glasgow

ManchesterBirmingham

LondonMunich

ViennaMilan

LarnacaTripoli

TunisMalta

Zurich

HamburgAmsterdam

Gothenburg

Istanbul

DusseldorfFrankfurt

Shanghai

SingaporeKuala Lumpur

ManilaBangkok

Jakarta

Addis Ababa

EldoretEntebbe

Dar es Salaam

Johannesburg

Cape Town

Lilongwe

Nairobi

LagosAccraAbidjan

Khartoum

Cairo

DubaiKolkata Hong Kong

TaipeiDhaka Guangzhou

Melbourne

Sydney

Brisbane

Perth

Auckland

Christchurch

Thiruvananthapuram

ChennaiBangaloreKozhikode

LahoreIslamabad

Peshawar

HyderabadMumbai

Delhi

KarachiAhmedabad

Malé

KochiColombo

Mauritius

Seychelles

São Paulo

New York

Los Angeles

San Francisco

Houston

Muscat

SharjahDammam

BahrainRiyadh Doha

Sana’a

Jeddah

Kuwait

Tehran

Dubai

AmmanDamascusBeirut

Luanda

Durban

Kabul

Route MapNovember 2009

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From branch to business classDeep in Italy’s agricultural heart, amongst Umbria’s rolling hills, is a 500-hectare olive oil farm and vineyard that has come to symbolise the greening of Emirates’ supply chain. Castello Monte Vibiano is a world-recognised premium olive oil and wine producer with a strong environmental conscience. Most famous for supplying Emirates with the small olive oil bottles served at meal time in our premium cabins, Monte Vibiano is on track to be the world’s first carbon neutral farm with an extraordinary commitment to quality and minimising its environmental footprint.

From electric vehicles to solar power and biofuels, Monte Vibiano has revolutionised their business by combining commercial success with a commitment to carbon neutrality and deep respect for their ancient land. This supplier is one small but important example of the work being done by many of our partners - at their instigation and with our encouragement - to help make a large industrial procurer like Emirates improve all areas of environmental impact.

As the CEO of Monte Vibiano, Lorenzo Fasola Bologna (pictured), says, “we believe this multi-million-dollar investment in environmental technology will be re-paid within five years.” Like Emirates’ investment in new, ultra-

efficient aircraft, a 360° eco-efficient strategy can pay financial and environmental dividends. Other examples where Emirates is working with suppliers to reduce, reuse and remove waste includes new lightweight, bio-degradable aircraft carpets, removing unnecessary packaging from amenity kits, food and beverage supplies and introducing recycled and reusable carry bags for passengers on our A380 aircraft.

Pure New Zealand - tourism and economic growthNew Zealand is a key part of Emirates’ global network. With 28 services a week from Dubai and Australia’s east coast to Christchurch and Auckland, Emirates is the only carrier operating to New Zealand from Europe, the Middle East and Africa. Since launching services in August 2003, over 850,000 people have travelled on Emirates’ New Zealand services and have carried 40,000 tonnes of New Zealand high-value exports.

Between May 2003 and May 2009, the number of overseas visitor arrivals from the Middle East and North Africa grew by 7% every year, outperforming New Zealand’s largest market, Australia, at 6%, and overall overseas arrivals into New Zealand which sat at only 1%. Emirates four daily services to New Zealand generate significant business and traffic from markets not served by New Zealand’s flag carrier. The contribution this makes to the New Zealand economy through the tourism market, which generates over NZ$24 million in foreign exchange every day, should not be underestimated.

Index of international arrivals 2003 - 2009

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