New US airline coalition sides with Gulf carriers in ‘subsidy’ dispute

In a sign of support for Qatar Airways and its Gulf competitors, a newly formed group of American carriers has sent a letter to the US government extolling global competition.

Saying the big three American airlines “don’t speak for us,” the new US Airlines for Open Skies argued that limiting Gulf carriers’ access to domestic trade routes would actually damage the local economy and possibly lead to retaliation.

For the past several months, Delta, American and United Airlines have been petitioning their government to renegotiate an Open Skies agreement with Qatar’s national carrier, as well as Emirates and Etihad.

The trade deal currently allows airlines, rather than government regulators, to determine the frequency and capacity of flights.

The group, called Partnership for Open & Fair Skies, claims that Gulf carriers have benefited from $42 billion in subsidies from their respective governments.

The three GCC airlines have all formally denied accusations of unfair competition, and the US government has said it will investigate the claims. Last Monday was the deadline to submit comments to the US Department of Transportation on the matter.

Opposing views

The new coalition speaking against the big three American carriers consists of four US passenger and cargo carriers – Atlas Air Worldwide, FedEx, Hawaiian Airlines, and JetBlue Airways (a codeshare partner with Qatar Airways).

The group “collectively transports approximately 42 million passengers annually, ships nearly 8 million tons of cargo, and employs approximately 350,000 people, 40 percent more people than the Big 3 combined,” it said in a statement.

However, Dallas News cited government figures that showed 162,849 full-time equivalent employees working for the four as of May 2015.

That compares to 269,992 for American, United and Delta and airline subsidiaries identified by the Bureau of Transportation Statistics, the newspaper reported.

After filing its letter with the US government last week, Hawaiian CEO and President Mark Dunkerley said:

“The Big 3 do not speak for all, or even most, U.S. airlines. Our coalition believes that the United States should honor its Open Skies commitments, which opens markets for U.S. carriers, promotes competition on international and domestic routes, and facilitates U.S. exports.”

The group also argued that the trade deal helps national security by facilitating the rapid movement of US military supplies around the world, including to the Middle East.

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