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Abu Dhabi, UAESaturday 18 August 2018

United States escalates Arabian Gulf airlines subsidies row

American, United and Delta turn to the US Congress for help in their bid to tighten aviation treaties with Qatar and the UAE.
Travellers wait to check in for flights at the Delta Air Lines counter of LaGuardia Airport in New York. Victor Blue / Bloomberg
Travellers wait to check in for flights at the Delta Air Lines counter of LaGuardia Airport in New York. Victor Blue / Bloomberg

The three biggest North American airlines, vying with Arabian Gulf rivals for overseas travellers, are turning to the US Congress for help in their bid to tighten aviation treaties with Qatar and the UAE, sources said.

The lobbying by American, United and Delta will include politicians overseeing transport and trade, plus other leaders, said one of the sources, who asked not to be identified because details are not public. The carriers also want to keep pressing secretary of state John Kerry and transportation secretary Anthony Foxx, the source said.

Courting members of the House of Representatives and senators opens up a new front in the campaign against what American, United and Delta say are unfair subsidies for Doha-based Qatar Airways and the UAE’s Emirates Airline and Etihad Airways. The trio of state-backed Gulf carriers has received more than US$42 billion in such aid during the past decade, claim the US airlines.

American, United and Delta say the Gulf carriers are able to undercut competitors on fares – drawing travellers to their bases in Qatar, Abu Dhabi and Dubai and away from European and Asian hubs served by the US industry.

The US should modify the so-called Open Skies agreements with Qatar and the UAE, according to the US airlines. The US has negotiated more than 100 such treaties since 1992, allowing direct access to cities around the world and, in general, spurring more competition and lower prices.

US airline executives met with federal officials in January to lay out their case against Emirates, Etihad and Qatar Airways, without making the evidence public. They followed up last month by sharing an investigative report with officials of the European Union.

American, United and Delta scheduled a news conference in Washington yesterday, and documents supporting their case will be posted online afterward, one of the sources said. That meeting will include unions representing pilots at each of the carriers as well as American and United flight attendants, a reminder of airline employees’ weight as voters.

“For the airlines, the best venue to address these extreme cases of subsidised competitors is through the provisions of the Open Skies agreements with Qatar and the UAE, which allow for consultations between the nations to address the subsidy issue,” Chicago-based United said in a statement issued on behalf of all three carriers.

Gulf aviation leaders have dismissed the US airlines’ objections, and Qatar chief executive Akbar Al Baker last month said: “We don’t receive any subsidy. What the government has given us is equity into an airline which they own.”

The state department is reviewing the US airlines’ materials, said an official who was not authorised to comment publicly. The department is working with agencies including the transportation and commerce departments on potential next steps, the official said.

The administration is weighing up two competing issues – the concerns raised by the airlines and the benefits to consumers, the US aviation industry, American cities and the US economy as a result of the Open Skies policy, the official said.

While the Obama administration takes the airlines’ concerns seriously and will thoroughly review them, it remains committed to the Open Skies policy that has boosted the US economy through increased travel and trade, and job growth.

Asked whether the state department was raising this issue with Qatar and the UAE, the official said that diplomatic conversations with allies remain private.

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