Qatar Airways chief executive Akbar Al Baker remains defiant amidst an onslaught of accusations from US mainline carriers that his airline received state subsidies, and plans to continue expanding into the USA.
Calling the allegations by the three US carriers a "bullying tactic", Al Baker says at a press briefing in Washington DC: "The US government should reject these groundless claims of harm."
Al Baker is visiting the US capital this week, and has held talks with Transportation Secretary Anthony Foxx and Commerce Secretary Penny Pritzker, he tells Flightglobal. The Departments of Transportation, Commerce and State plan to review allegations raised by Delta Air Lines, American Airlines and United Airlines that Qatar Airways, along with Emirates Airline and Etihad Airways, received more than $42 billion in state subsidies from their respective governments.
The review is expected to begin end-May.
"If the US wants to talk to the government of Qatar, this is not the business of the airline," Al Baker says. "I think it's unnecessary... There is no cause for these negotiations to be opened when an air services agreement was signed... we are operating within those parameters."
Qatar and the USA have been open-skies partners since 2001.
The US mainline carriers say the alleged subsidies received by the Gulf carriers have allowed them to dump capacity on routes, and that US airlines are not able to compete effectively as a result. Delta, United and American are calling on the US government to block the Gulf carriers from adding new service to the USA in the meantime, although US authorities have not yet heeded this demand.
Al Baker points out that no US carrier flies to Qatar, and no US airline competes with Qatar Airways on any nonstop market. "US carriers demonstrate little interest" in serving the Gulf and South Asia markets, which are a key focus in Qatar's network, he adds.
US mainline carriers have said they left these markets because they cannot compete profitably with the Gulf carriers. United Airlines, for example, stopped flying to Doha in 2014 while Delta withdrew service to Mumbai in March.
Contrasting US carriers' connections with that of Qatar Airways, Al Baker says US airlines place their Gulf and India-bound passengers onto their European partners at the "congested airports" of Paris and Frankfurt. "We provide one-stop connections, avoid congested airports and eliminate long waiting times," he says. "We offer easy connections to 12 points in India and seven points in Pakistan along with Bangladesh, Sri Lanka and Nepal - countries that have zero US service."
Reiterating previous statements, Al Baker accuses the US airlines of hypocrisy, pointing out they had also received cash and loan guarantees from the US government in the wake of the September 11 terrorist attacks that crippled the US airline industry. "They use a broad definition of subsidy for us but a narrow one for themselves," he says. "State ownership is not synonymous with subsidy."
The three US carriers in March released a lengthy report detailing the alleged subsidies against the Gulf carriers, after obtaining financial statements in several jurisdictions that the Gulf airlines operate to.
Asked if Qatar Airways plans to open its books publicly, Al Baker retorts: "Why should I? They [US carriers] have already taken our accounts." He adds that Qatar Airways will release its financial statements if it files for an initial public offering in the "not too distant future". "It's up to the owner of Qatar Airways [the Qatari government] if they want to open their books or not."
Al Baker says state ownership of Qatar Airways "is not unique". "Why don't they talk about China, Russia, India, their partners in Africa, and partners in Europe? Alitalia is a good example."
Delta, American and United have said that they are taking issue with Gulf carriers specifically due to the magnitude of the subsidies that they allegedly received. They US airlines are backed in their claims by their unions as well as Southwest Airlines' pilots union.
Al Baker, however, dismisses the US mainline carriers' campaign as a "transparent attempt" to block the expansion plans of Gulf carriers, and says the US airlines "got greedy to make more profits".
"The margins they are getting, between 10 and 15%, no other airlines in the world have achieved these kinds of margins," he says. Adding that US mainline carriers are controlling domestic capacity, he adds: "They have reduced capacity allowing them to keep prices high and provide crap service."
Even as the US mainline carriers are calling on their US government to stop Gulf airlines from adding new flights into the USA, Qatar Airways recently announced it will launch service to Los Angeles, Boston and Atlanta in 2016.
Al Baker dismisses speculation that Qatar Airways is adding Atlanta to rile Atlanta-based Delta, whose chief executive Richard Anderson has been notably vocal in his criticism of the Gulf carriers.
"Our announcement of Atlanta is not because of attacks coming from that place," he says. "There is a huge community from South Asia that are residing in and around Atlanta."
Qatar Airways plans to continue expanding in the USA, adds Al Baker. The airline is looking at adding a second daily frequency into Washington Dulles, and is also in talks with Pittsburgh International airport to start service there after the airport approached the airline, he says.
Source: Cirium Dashboard
