Thursday, Apr 18, 2013

(Updates with comment from Etihad, details) 


 
   By Doug Cameron

Dubai's airport authority on Thursday said it would welcome any effort by the U.S. to set up a customs post for airline passengers heading to the country from the Gulf emirate.

The world's second-largest international airport after London Heathrow backed an effort to set up a U.S. facility in neighboring Abu Dhabi that's being part-funded by the Gulf emirate. Airlines in the U.S. and Europe argue it will distort competition.

Passengers heading for the U.S. would be able to avoid long lines at U.S. airports by pre-clearing customs and immigration in Abu Dhabi, the dominant partner in the United Arab Emirates, which includes Dubai.

"Dubai International is well positioned to be the next port of call for U.S. pre-clearance," said the airport authority in an emailed statement.

Any move to open such a U.S. facility in Dubai likely would fan existing tensions between Dubai's Emirates Airline and some U.S. and European rivals.

Etihad, Emirates and Qatar Airways have been rapidly expanding services to North America over the past two years, connecting passengers through their hubs to cities in Asia, the Middle East and Africa. Some rivals have claimed they receive unfair government support, a charge the Persian Gulf carriers all have denied.

Emirates is far larger than Abu Dhabi's Etihad Airways, which would be the sole beneficiary of the plan to set up a U.S. customs post at its hometown hub, which isn't served by any U.S. carriers.

Abu Dhabi's dominant political position in the UAE and Etihad's smaller scale compared with Emirates may hinder any push for Dubai to secure a U.S. customs post, according to industry experts.

The effort to establish a post in Abu Dhabi, confirmed Wednesday by the U.S. Customs and Border Protection agency, drew sharp criticism from U.S. and European airlines.

A4A, which represents U.S. carriers, protested that Abu Dhabi shouldn't qualify for a post, citing Customs and Border Protection agency requirements that an airport needs to handle more than 400,000 passengers a year to the U.S. and be served by a U.S. carrier.

Etihad noted in a statement Thursday that the facility would aid passengers traveling with its code share partner, AMR Corp.'s (AAMRQ) American Airlines. Etihad has a minority stake in Ireland's Aer Lingus (EIL1.DB) and already funnels passengers to the U.S. through Dublin, which also has a U.S. customs pre-clearance post. It also developing an alliance with India's Jet Airways, which announced plans Thursday to launch more flights to Abu Dhabi.

Dubai also played up the role of U.S. carriers, noting in its statement that it is served by United Continental Holdings Inc. (UAL) and Delta Air Lines Inc. (DAL).

With U.S. carriers and the U.S. Air Line Pilots Association ratcheting up attacks on the Abu Dhabi decision, the Administration in recent weeks revised its justification for setting up the facility, according to people familiar with the discussions.

The Department of Homeland Security and the State Department began stressing that vetting U.S-bound passengers in Abu Dhabi, instead of on U.S. soil, will end up enhancing national security. Proponents of the facility also have said it's necessary to more-effectively control plants and animals coming into the U.S.

Customs and Border Protection had no immediate comment. The agency also operates overseas pre-clearance facilities in Canada, Ireland and the Caribbean. No timescale has been revealed for opening the proposed Abu Dhabi facility.

--Andy Pasztor and Amirban Chowdhury contributed to this article.

Write to Doug Cameron at doug.cameron@wsj.com

(END) Dow Jones Newswires

18-04-13 2216GMT