Three government agencies in the US have agreed to officially look into complaints from American carriers that Gulf airlines are subsidized by their respective governments.
The US departments of State, Commerce and Transportation announced the launch of a formal proceeding on Friday.
The action comes a month after a trio of American airlines offered detailed figures to support claims that Qatar Airways, Emirates and Etihad receive government funding that allow them to unfairly compete against American carriers.
In a joint statement, the departments said:
“The U.S. government takes seriously the concerns raised in the report and is interested in receiving insights and feedback from stakeholders before any decisions are made regarding what action, if any, should be taken.”
If the US airlines are successful in convincing lawmakers to renegotiate the agreements with Qatar and the UAE, Gulf carriers could face restrictions on the number of US flights they’re allowed to operate.
Over the past few years, Qatar Airways has been expanding rapidly in the US, introducing service to Miami, Philadelphia and Dallas/Fort Worth in 2014.
Allegations
According to a report circulated publicly last month by an advocacy group called Americans for Fair Skies, Qatar’s national carrier has received some $16 billion in subsidies in the past decade.
It charged that this assistance has enabled it “to expand at a rate that would have been impossible otherwise and to remain in business in spite of its poor financial performance.”
Qatar Airways is owned by the government and does not disclose its financial results.
However, speaking to CNN in February, the carrier’s CEO Akbar Al Baker denied that his airline received any government aid, saying:
“We don’t receive any subsidy. What the government has given us is equity into an airline which it owns.”
The US agencies that are looking into American carriers’ allegations are seeking comments and materials from interested parties until the end of May.
It remains unclear who will weigh in, but consumer advocates such as the United States Travel Association have already come out in support of GCC carriers, saying that open skies agreements have made it “easier and cheaper for American citizens to travel abroad” while helping to attract more foreign tourists.
Thoughts?
