The chief executives of American Airlines, Delta Air Lines and United Airlines gathered to reiterate the need to limit the expansion of the Gulf carriers to the USA, adding a newfound sense of urgency to the issue they began pushing in January.
They laid out a largely cohesive message on the issue of alleged subsidies to the big three Gulf carriers – Emirates Airline, Etihad Airways and Qatar Airways – at likely their first ever joint event at the National Press Club in Washington DC today.
“We’ve seen what the Gulf carriers have done to the carries in Europe, we’ve seen what they’ve done to Qantas, we’ve seen what they’ve done to Singapore,” says Jeff Smisek, chief executive of Chicago-based United. “We know how this movie ends, it does not end well.”
Their comments come as both Emirates and Qatar have announced a slew of new routes to the USA, including ones to Atlanta, Boston and Orlando, in what the US carriers say represent a 25% increase in Gulf capacity, including Etihad, to the country since January.
“They’re clearly trying to do everything they can to win the case before the clock,” says Doug Parker, chief executive of Fort Worth, Texas-based American.
The mainline carriers allege that the three Gulf carriers have benefitted from more than $42 billion in subsidies from the Qatar and United Arab Emirates governments and, as a result, have been able to essentially “dump” seats into the US market under World Trade Organisation definitions.
Representatives of the US government have said that they are taking the subsidy allegations “very seriously” with the departments of Commerce, State and Transportation opening a joint docket to take public comments for a review expected to begin by end-May.
“We’re trying to balance the need for a prompt government decision on how whether to respond to the legacies with the need to do a good job,” said Thomas Engle, deputy assistant secretary for transportation affairs at the US Department of State, on 8 May.
The mainline carriers' push has strong opponents. Earlier today, representatives of travel industry groups and airports gathered at a symposium in Washington DC to voice their support for the Gulf carriers. They cite the network benefits of open skies and the financial benefits that the US carriers have received.
The comments come a day after Etihad released a study claiming that US airlines have received about $70 billion in financial benefits from the government since 2000.
The chiefs of Emirates, Etihad and Qatar have all visited Washington DC since the subsidies row began to make their case. Qatar chief Akbar Al Baker was in town just two days ago, calling the push “bullying tactics” by the US carriers.
The executives of American, Delta and United all reject the ideas that they are opposed to open skies or have received subsidies from the US government.
“We have 114 open skies agreements around the world, all of which we support and, by the way, we also support open skies in the instance of these three carriers – we just have to have actions taken to level the playing field,” says Richard Anderson, chief executive of Atlanta-based Delta.
In terms of financial support, all three say that US bankruptcy reorganisation is far from government subsidies. Parker, in a show of solidarity with American’s workers, called on all those at the event who had lost their pensions in a reorganisation to stand up.
About a third of the attendees at the event stood, however, many were members of the major US airline labour unions that support the airlines in their push to limit the Gulf carriers.
There was a general sense of urgency among the three executives around the limited action of the US government on the issue to date. While not stating it directly, they are clearly anxious for the US to limit Gulf carrier capacity and seek consultations with the governments of Qatar and the UAE sooner rather than later.
This is a marked change from the comments of Will Ris, senior vice-president of government affairs at American, in March when he said: “We are very pleased with the reaction of government officials. We’re confident they will do something.”
The simple fact that Anderson, Parker and Smisek were all in the same room speaking jointly on a topic is a signal of that urgency – and something that may not happen again for some time.
Smisek, jokingly towards the end, says they “hopefully never” will all have to come together on an issue like this again.
“I hate these guys, let me tell you – and they hate me too – [but] we’re here together because this is such a serious issue,” he says.
Source: Cirium Dashboard
