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Unfair agreement, unbalanced flight share: foreign airlines take advantage of dumping policy

08 Sep 2019 Kabul Now

The Daily Etilaat-e-Roz have got access to some evidences which suggest that the Afghan government has signed open sky agreement with the UAE government. The evidences show that the government has also signed an agreement with Turkish Airline, granting it unlimited access to airspace. The two agreements—giving upper hands to the foreign airlines—have pushed Afghanistan’s airlines on the brink of bankruptcy.       

Findings indicate that the open sky agreement—which was signed between former foreign minister, Zalmai Rasul and UAE foreign minister, Shaikh Abdullah bin Zayed Al Nahayan in New York on September 24, 2013—is in contrast to considerations made by Afghanistan Civil Aviation Authority (ACAA) and national airline companies.

According to experts, the foreign airlines are taking the advantage of dumping policy in Afghanistan to increase their market share in the country, and derive an unfair competition.

Flydubai make a lot of profit in Afghanistan

As evidences show, the UAE airlines make USD 62 million profits from Afghanistan on annual basis.

Flydubai has just recently asked the Afghan government to grant it permission to take its fourth daily flight to Kabul. Afghan national airlines, however, warn they would go bankrupt if the government grants permission to it. The airlines owners claim that UAE is pressuring the ACAA through Afghanistan National Security Council (NSC) to accept Flydubai’s demand but the NSC has rejected it.

Describing the open sky agreement as ‘harmful’ to Afghanistan’s aviation industry, Ariana Afghan Airline and Kam Air have filed complaints with the ACAA, the Ministry of Economy, Administrative Office of the President, National Security Council, and the secretariat of Council of Ministers, asking them to reject the demand by Flydubai. They have repeatedly called for a balanced share of flights between Afghan airlines and UAE airlines from Kabul to Dubai and vice versa.

“Some policies approved by previous government such as open sky agreement and lack of balanced share of flights have caused a slowdown in business of Afghan airlines, a problem that might push the two [airline] companies to become bankrupt, as Safi Airways went bankrupted,” read a complaint letter wrote by Ariana and Kam Air.

On November 04, 2018, Afghanistan’s High Economic Council tasked the Afghan ministry of finance and the ACAA to evaluate the open sky agreement after receiving specialized consultation from DLA Piper, a global or multi nation law firm.

The two Afghan airlines, however, state the Afghan authorities have not made their evaluation so far.  

Meanwhile, Mahmood Shah Habibi, former head of ACAA, believes that the open sky agreement serves the interest of developed countries and economies. He noted that the Gulf States and the UAE have been benefiting from open sky agreement singlehandedly.

Farid Paykar, head of Afghanistan airlines union, says, “Some national airlines, including Safi [Airways], became bankrupt.” He criticized the Afghan statesmen, saying that Afghanistan has given permission to foreign airlines to take more flights while local airlines face a shrink in their business.  

Daud Ali Najafi, former minister of transport and civil aviation, underlines that the open sky policy does not serve the interest of Afghanistan. He says despite his opposition to signing the open sky agreement, Rasul signed it instead of him.

Mohammad Qasim Wafayezada, the head of ACAA, also criticizes the agreement. He says no one and institution asked the ACAA for comment on the agreement when the two parties signed it. According to him, the agreement grants freedom of air to airlines of the two countries.

“The open sky policy has not been implemented as it was agreed. We complain about number of flights the [UAE airlines take to Kabul and from Kabul],” Wafayezada clarified. “The agreement was handed over to the DLA Piper to be evaluated,” he said, adding that the DLA Piper did not come up with any result, and did not provide any consultation.

Afghan airlines cannot fly to western countries

Afghan airline companies face major blockades when it comes to transport passengers to European and North American countries, an opportunity that foreign airline companies have taken. As Afghan airline companies cannot fly to Europe, foreign airline companies take the advantage of dumping policy in Afghanistan, and transport Afghan passengers to different destinations, in addition to transportation of transit passengers.

Afghan airline companies claim three United Arabia Emirates companies seized the opportunity of open sky policy of Afghanistan, where they fly unlimited number of flights and unlimited number of destinations. The three UAE airline companies also implement dumping policy.

“The agreement between Afghanistan and two foreign countries, including UAE and Turkey, which was signed despite the resistance of Afghan airline companies, is unfair,” wrote the head of Afghanistan airline union in letter number 14919, dated August 27, 2019 to Afghan President Ashraf Ghani.

The letter added that from January 2018 to July 2018 three UAE airline companies made five flies in one day—Fly Emirate made one flight, Flydubai made three flights, and Al-Arabia made one flight. Three companies’ seats were 247 thousand and 417, but in fact they transported 179 thousands and 438 passengers.

According to the head of Afghan airline companies, three UAE airline companies make 35 flights every week, in return Afghanistan’s national airline, Ariana, makes five flights to UAE under the open sky agreement signed between UAE and Afghanistan. The UAE airline companies transport 25 thousands and 631 passengers from Afghanistan to UAE, average in one month.

The UAE airline companies sell tickets worth of USD five million and 125 thousands and 200 in a month. The companies sell worth of USD 61 million 514 thousands and 400 ticket on annual basis. If this revenue, even half of it, considered for Afghan airlines, more than USD 61 million would have been earned by Afghan airlines on annual basis.

According to Civil Aviation Authority of Afghanistan, as many as 2,300 passengers were transported on daily basis by Afghan airlines and UAE airlines to Dubai, a port that has become for 90 percent Afghan passengers as a transit route to other destinations around the world, while 10 percent of them stay in Dubai. UAE airlines even try to transport transit passengers to Saudi Arabia, a destination that Afghan airlines can fly to, claim the Union of Afghan Airlines.

“Fly Dubai airline has taken over flight destinations of Afghan airlines and has damaged direct flights of Afghan airlines to many destinations,” wrote Farid Paykar. “The unfair policy and the dumping policy have badly damaged Afghan airlines in the region.”

Qasim Wafayezada acknowledges unfair competition of UAE airlines with Afghan airlines. When Afghan airline Safi Airways made flights to Dubai, UAE companies reduced the cost of tickets to USD 90, according to Wafayezada. The UAE companies do not follow the rules and orders set by the Afghan authorities.

“In the next session of high economic council, we discuss alternative policies,” said Wafayezada. “We mull multi-options. First we put pressure on United Emirates to allow Afghan airlines for operating in the market fairly, otherwise, the Afghan government would do the same thing as United Emirates do.”

The Afghan authorities put efforts to remove Afghan airlines from list of banned airlines in European countries, so they would no longer be depend on transit routes.

Recently, Flydubai airline requested the Afghan government to allow the company to make the fourth flight in a day. But Afghan airlines, including Ariana and Kam Air, requested the Afghan authorities to not grant Flydubai permission to take four fights in a day. The Afghan airlines argue that Flydubai will transport those passengers that are share of Afghan companies.

Wafayezada says the Afghan airlines have the right to complain, but the Afghan government has signed an agreement, under which the Afghan authorities must grant permission to UAE airlines to make seven flights in a week—UAE airlines already make six flights in a day and Flydubai attempted to make four flights between Kabul and Dubai in a day.

The Afghan authorities rejected UAE’s request to grant permission to Flydubai to take the fourth fight between Kabul and Dubai in a week. In a letter dated July 30, 2019, serial number DCAA/ASA-5/A-75, UAE authorities requested Hamdullah Mohib, national security advisor to Afghan President Ashraf Ghani, to interfere in the issue of granting permission for Flydubai to make four flights in a day.

“We are pleased to let you know that we welcome fourth flight of Flydubai in the section of Kabul-DXB,” Civil Aviation Authority of Afghanistan, in a letter dated August 3, 2019, serial number 2025, wrote to the UAE aviation officials. “Considering letter serial number GCAA/ATD/075-19 by UAE General Civil Aviation Authority regarding fourth flight request of Flydubai, and based on agreement between the two states signed on December 13, 2018 at ICON 2018 session in Nairobi, Kenya.”

In the letter, the Afghan authorities mentioned that both states should give equal shares to airline companies of the two countries as stated in the agreement. The Afghan aviation officials requested the UAE aviation officials to grant permission to Afghan airline Kam Air and Ariana for making additional flights between Kabul and Dubai.

“I went to the aviation administration and they told me that NSA office and Presidential Palace interfered in the issued,” said Paykar.

In response to question whether Afghan authorities made the decision under political pressure, Wafayezada said that his office had received dozen letters in the last two years from UAE officials. Initially, the Afghan authorities proposed a provincial capital destination for the fourth flight of Flybubai in a day, but the UAE aviation officials declined to accept the proposal.

“We resisted and did not grant permission for Flydubai to make four flights in a day” said Wafayezada. “Officials of Emirates launched a big campaign, reaching the Presidential Palace and NSA office and other government officials. At the end, with due consideration of national interests, and the role of Emirates in the Afghan peace process, the permission was granted conditionally. We survey market and make a new decision.”

Kabir Haqmal, spokesman for Afghanistan’s National Security Council, said that NSA office had received dozen letters regarding different issues related to internal and external offices.

“We have not sent an official letter to the aviation administration,” said Haqmal. “The administration is independent and makes decision based on rules and orders.”

Daud Ali Najafi believes that the aviation administration and the Afghan government must put pressure on United Emirates to make balance between flights of airlines of the two countries and also Afghan airlines provide better services and make timely flights.

Mahmood Shah Habibi, former director of Civilian Aviation Authority of Afghanistan, said that if foreign airlines take the advantage to more flights between Kabul and Dubai, the Afghan airlines will lose.    

Original Link: https://kabulnow.af/2019/09/unfair-agreement-unbalanced-flight-share-foreign-airlines-take-advantage-of-dumping-policy/

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