US airline heads once again point to Gulf airlines’ subsidisation

In an opinion piece published on July 12 in USA Today, the three heads of big American airlines – Doug Parker, chief executive of American Airlines; Ed Bastian, chief executive of Delta Air Lines; and Oscar Munoz, chief executive of United Airlines – came together to complain at certain Middle Eastern state governments subsidising local carriers to the detriment of US airlines.

They also said that the practice is contrary to trade agreements.

The three chief executives pointed to two foreign countries, namely the United Arab Emirates and Qatar, which have violated trade agreements with the US by “funnelling over $50bn in subsidies into their government-owned airlines”.

These carriers are identified as Emirates, Etihad Airways and Qatar Airways.

“These state subsidies are destabilising the global airline industry and threatening to undermine our nation’s entire system of trade enforcement. Left unchecked, they send a signal that other countries can ignore our trade deals and trample upon our workers without consequences,” the joint piece declared.

“To be clear,” the opinion piece affirmed, “US airlines are not opposed to competition. But what’s happening with the Qatar and UAE airlines is not fair competition.”

The chief executives asserted that if “Qatar and the UAE aren’t willing to uphold their side of the deals, the United States should consider removing itself from these two Open Skies treaties altogether.

“The United States must act decisively to hold Qatar and the UAE accountable. Failure to do so would reward bad behaviour and signal to other countries that they too are free to exploit American workers. That is a dangerous precedent that our airline workers and our country cannot afford,” the piece stated.

American, Delta and United are all members of the Partnership for Open & Fair Skies, a coalition that calls for the US to enforce its Open Skies agreements with the UAE and Qatar and which has strongly opposed what it believes to those nations’ governments pumping more than $50 billion in subsidies to their state-owned airlines.

In January 2015, the Partnership published a whitepaper providing what it described as a “comprehensive overview and analysis” of the issue.