[Quest:] We're back, QUEST MEANS BUSINESS. The chief executive of Emirates is warning that if the U.S. scraps its "open skies" agreements, foreign airlines may have trouble flying into the UAE. Sir Tim Clark says if "open skies" is scrapped, there could be new anti- trust concerns at play for all the U.S. carriers. At this week's IATA AGM, the international the airline association, the chief executive of American Airlines, Doug Parker, told me it's his responsibility as an airline CEO to bring this issue to bear.
[Doug Parker, Ceo, American Airlines:] You know, this is an issue that we believe has the potential to have a profound impact on our airlines, on the U.S. commercial aviation business and on the people we employ. And we are obligated to go fight for all those things. And in this case, some may have other views, we felt very strongly that indeed you know, what we're doing is right and that what and that these fights and the potential for flights that fly to the United States from other parts of the world will be subsidized by governments, is going to have a big impact on the U.S. airline industry.
[Quest:] Sir Tim Clark, the president and CEO of Emirates, joins me here in the C suite. You didn't launch yourself out of the chair when you heard. This is your speech that you have to the Wings Club here in New York today. You called the U.S. claim "stuff and nonsense," an extremely dodgy 55-page dossier, which indeed this is it. And you go on to warn that basically we could see the rise of a new international aviation model which would be out with the old guard, in with the vanguard. What do you mean?
[Sir Tim Clark, Ceo, Emirates:] Well, I think as a result of everything that's been going on over the last couple of months, three months, the allegations that have been made against the Gulf carriers, which are manifestly incorrect, but and there has been a polarization of the aviation community with regard to what's been going on here. So you see many of the existing alliance structures starting to fracture and there is a possibility of new arrangements coming into place.
[Quest:] Are you now fearful that the U.S. government might actually agree and the merits, but they might requirements to open consultations with the UAE and Qatar?
[Clark:] No, I'm not of that mind at all. I believe that once we have submitted our proposal, our rebuttal of everything that's been said, including what has already gone into the U.S. government dossiers and dockets that they will take a slightly different view.
[Quest:] So essentially and I've sort of read this several times over the past few months essentially the allegations are that you get letters of credit, that the fees that you pay at your airports are too low to recoup the cost of the airport, that there's common ownership, the accounts are dodgy and that you don't transact at arm's length with donata and all the other organizations. Do you transact at arm's length?
[Clark:] So as I said earlier, that's all complete stuff and nonsense. We are totally transparent. We always have been.
[Quest:] You transact at arm's length?
[Clark:] Absolutely. And we've been certified as doing so by the international auditors. So as I said, our financials are absolutely clear and transparent. You can test anything. I've also invited organs of the U.S. government to come down to Dubai, examine our books and satisfy themselves that they can see that we do not do anything that is illegitimate, illegal or whatever. It is all totally above board.
[Quest:] So but the U.S. carriers and I was at IATA and there is a fundamental fissure now in the industry, which it knows who believe the U.S. is right and those who believe that you are the future model. The U.S. how does the U.S. in your view get this so wrong then? What's going wrong with the U.S.?
[Clark:] I don't think the U.S. is getting it wrong at all. I think they're being led down a path which is a tad misguided. It's based on false suppositions and allegations, which need to be dealt with obviously. And they are dealing with them in the best way they can.
[Quest:] But these allegations about the Gulf Three have swirled for as long as I've covered aviation and I suspect since longer since you've been at Emirates. They've always said something smelly going on with those airlines when you run a bloody good airline and the food's magnificent and the planes are brilliant. But something dodgy in the accounts.
[Clark:] Well, I guess you're right. We've had to deal with this for many years. And we've addressed it successfully for many years and we will continue to address it successfully for many years to come because I don't suppose it's going to go away. All I can say is that for 23 years, Emirates has been disclosing its accounts. It's been congratulated on the quality of its financial statements, the veracity of the financial statements. And there is absolutely no reason to doubt that we do anything but operate our company on a fully commercial basis.
[Quest:] Is it likely this also becomes a geopolitical issue? I'm thinking obviously CENTCOM's space there. There are strategic, there are global security issues, terrorism issues between these governments. Is it likely that the governments in the Gulf would say, all right, you want to stuff our airlines...?
[Clark:] No, I don't believe it'll get to that at all. I believe that we will argue the case in front of the U.S. government departments on the basis of the merits of our particular case. I think once we have finished that exercise, everybody will be satisfied that we are right and what has been said about us by the U.S. big three legacy carriers is fundamentally wrong. We do not adversely affect their business because, frankly, they don't fly to our region. American Airlines doesn't operate in the Middle East, Africa, West Asia, Indian subcontinent at all. So how can we possibly be doing damage?
[Quest:] I need to talk to you about one other area: FIFA. You're looking remarkably prescient from having pulled out from stopping a global sponsor of FIFA. Do you feel that you obviously feel justified you saw something that the others didn't.
[Clark:] Well, I won't say that we saw something that others didn't. What we are particular pleased that we're not in that space at the moment. And the commercial terms of FIFA's offering to us for continuance of our sponsorship just didn't stack up in any shape or form.
[Quest:] But what are the commercial reasons? Or did you just not like the smell of the way they do business?
[Clark:] You know, there were concerns in other areas. That's as far as I will I'm prepared to go on that. But certainly, primarily it was because we were asked to be paid to pay a lot more than we had been paying and when we did the return on investment analysis, even though it is the largest sports tournament in the world, it wasn't going to stack up for us.
[Quest:] What do you now that Blatter's going, would you be looking to go back in again if the terms were right?
[Clark:] If the terms were right, yes, I'm sure we would. It is something that we left with great reluctance. Obviously any major sponsor would. But if things are sorted out in FIFA and we get a commercial offering that is as good as it was in the old days, then, yes, sure, we'd go back and look at it, seriously.
[Quest:] But there has to be because obviously what we have found and let's face it, I'll be quite honest, Tim, you're the first all right, previous sponsor, former sponsor, CEO who's prepared to talk on the record. Everybody else is running for the hills.
[Clark:] Well, look, I can't speak for them. I would just repeat what I said, we are glad we're not in the space at the moment because of the fallout over the last few weeks. It is a big pity; the big loser, of course, is football. Let's hope that we can get it back onto some kind of track. It becomes the beautiful sport that it is. The sponsors are back in competing against each other to get onto the tournament because it is a hugely competitive battle to get that kind of exposure. But it's worth it.
[Quest:] Between FIFA corruption, Gulf Three, big three allegations, I tell you, you've got your work cut out for you.
[Clark:] Oh, well, we can deal with it. No, no.
[Quest:] All right. Good to see you. Thank you now the Swiss office of the attorney general has confirmed to CNN that it has now seized and is analyzing computer data from FIFA headquarters. FIFA says it will postpone the bidding process for the 2026 World Cup amid the investigation. Speaking earlier, the general secretary, Jerome Valcke, hit out at the media, calling for his head. Mr. Markey said he had nothing to do with the $10 million payment to the Caribbean football union connected with South Africa's winning bid.
[Jerome Valcke, Fifa Secretary General:] The file was given to the ethics committee of FIFA as it was given to the audit and compliance committee of FIFA. None of the chairmen of both of these committees have found any wrongdoings and anything would justify to blame FIFA's administration or to blame the secretary general FIFA, to blame me. Nothing. So I'm sorry, I don't know what to say more than that. I have no more answer about this case, has no more thing to say. I mean, you have decided that, after Blatter, I have to be the cut, to be the head to be cut, fine.
[Quest:] "WORLD SPORT's" Don Riddell is at the CNN Center, joins me now. Don, when we look at that, I mean, look, everybody's now jumped into the fray.
[Don Riddell, Cnn Correspondent:] Well, yes. I mean, Jerome Valcke had to spend a lot of time defending himself yet again today while he was in Russia, talking about how as far as he and the Russians sports minister are concerned, the 2018 World Cup will go ahead as planned. But this would be another significant developments or at least evidence that these twin criminal prosecutions against FIFA continue with the information now that - information has been seized from the head office and reportedly from the top men, Valcke and Sepp Blatter.
[Quest:] One question that I'm confused and it doesn't take much to confuse me on this subject but one question I am confused about, does FIFA have the legal right to withdraw either of those in the event of proven corruption?
[Riddell:] Well, that's very, very interesting. I mean, we heard Domenico Scala talking about this the other day. And he was the first senior FIFA official to say that actually they would have the right, if it could be proven that there was corruption in the bids for Russia 2018, Qatar 2022. Of course, you can imagine, Richard, what that would unleash in terms of legal proceedings and counter suing back onto FIFA. It would be a monumental undertaking to actually take those tournaments away, especially when you consider how much Russia and Qatar have spent building those stadiums, putting the infrastructure in place, all based on a document that they would assign to FIFA, saying you've got the World Cup in those years. So potentially, I suppose, theoretically, it could happen. I think in practice it would be very, very difficult.
[Quest:] And I hope you were listening to Sir Tim Clark and what he was saying from Emirates. He says that they didn't like the commercial arrangements but they would be back in the ring if they were if things got better. But it's interesting. None of the other sponsors have gone anywhere near as close as speaking publicly, which I think speaks volumes for Emirates.
[Riddell:] Yes, although to be honest, he didn't really say very much, did he? I mean, he played as they wanted too much money and we weren't prepared to spend that much money; however, sponsoring the World Cup and 22 men on the pitch is absolutely what we would want to be doing because it's a fabulous tournament. But clearly he's relieved that they don't have to deal with any of the fallout and the mess right now because people who are sponsoring FIFA right now, their names are associated with just the most unholy of messes, which is just going to get worse and worse.
[Quest:] All right. Don Riddell, who is at CNN Center, thank you, sir. Now a Nobel Prize-winning scientist is under fire for sexist comments. He said he can't work in labs with women because they cry and fall in love.