WSJ: “Big U.S. Airlines Fault Persian Gulf Carriers”

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American Airlines, Delta Air Lines, and United Airlines have started to lobby the US government to restrict the expansion of the gulf airlines namely Emirates, Etihad and Qatar due to alleged “subsidies”.

WSJ Big U.S. Airlines Fault Persian Gulf Carriers

The United States and the gulf states have an Open Skies agreement that allows the airlines from these countries to freely operate flights in-between, as long as they don’t receive government subsidies.

You can access the WSJ piece about the issue here and below is an excerpt from the piece:

The chief executives of the three largest U.S. airlines said they are pressing the government to modify or—lacking substantive remedies—annul air treaties with two Persian Gulf nations. The CEOs cited what they claim are subsidies and government industrial policies that favor three of the Gulf region’s fast-growing carriers, distorting global air transportation.

The heads of American Airlines Group Inc., United Continental Holdings Inc. and Delta Air Lines Inc. said in a joint interview Thursday that the three state-owned Gulf airlines have received $42.3 billion in “quantifiable” subsidies since 2004, accompanied by other benefits including breaks on local airport infrastructure and services, exemptions from corporate taxes and advantages from “opaque” related-party transactions.

The U.S. executives said the policies are giving a big leg up to Emirates Airline, Etihad Airways and Qatar Airways, helping them expand globally by stimulating low-fare traffic through their hubs. More recently, the three Gulf carriers have targeted growth to U.S. airports, where they can fly freely and set prices without restriction due to “open skies” treaties between the U.S. and the United Arab Emirates and Qatar.

Conclusion

I have criticized the gulf airlines for lack of customer service and the somewhat draconian employment conditions.

The US airlines should keep in mind the “subsidies” they have received in the past 10 to 15 years, when all of the above mentioned airlines and their predecessors went through Chapter 11 bankruptcy protection numerous times shredding liabilities left and right giving them “unfair” advantages compared to foreign airlines that didn’t have the same facilities available.

The US airlines here are just whining about the lack of innovation that they haven’t had for ages beyond being the market leaders in incidentals charges.

Why not let the flying public decide? If the US airlines above could provide competitive fares and service, I am sure that the flying public would choose them over the Emirates, Etihad and Qatar Airways.

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