The US government is “taking very seriously” the request Delta Air Lines, American Airlines, United Airlines and their labor groups have made that consultations begin with the governments of the United Arab Emirates (UAE) and Qatar on alleged subsidies for the airlines from those countries, a US Department of State official said.
The government is doing its “due diligence” on the subsidy claims the US carriers have made against Emirates Airline, Etihad Airways and Qatar Airways, Tom Engle, deputy assistant secretary of state for transportation affairs, said, speaking at the Phoenix International Aviation Symposium. The effort is an interagency affair, with State, Transportation and Commerce leading the investigation, with help from the US Trade Representative and the Council of Economic Advisers, Engle said. He declined to describe a timeline for when the government will decide if it will proceed with consultations. Public comment is being solicited on a website, and the government will provide the opportunity for rebuttals before making a decision.
Consultations, or formal government-to-government talks, are provided for under the Open Skies treaties should one party have a grievance or dispute. At issue is whether the three Persian Gulf carriers receive subsidies that distort the market, making it difficult for US carriers to compete for lucrative international traffic, particularly to South Asia.
Representatives from Delta, American and the Air Line Pilots Association (ALPA) drove this point home forcefully at a panel discussion here, while also reiterating their support for open skies as a policy.
But at issue is that the three Gulf carriers are “instruments of government policy,” existing solely and subsidized to carry out Qatar’s and the UAE’s aims to flow passengers over their hubs in Doha, Dubai and Abu Dhabi, Ben Hirst, Delta chief legal officer said. “We are concerned about United States policy that opens the doors of this huge market to entities that basically arms of the state,” American SVP-government affairs Will Ris said.
John Byerly, the former State Department official who negotiated more than 70 Open Skies policies and is now a consultant to Emirates, rejected the US airlines’ claim to support Open Skies. Asking for Gulf carriers’ capacity to be frozen at the Jan. 28 level until consultations play out is an abrogation of the treaty. Open Skies liberalize the market. “They [the Gulf carriers] are beating [the US airlines] in the market place,” Byerly said. “These US airlines had a nice, comfortable little nest, with alliances and joint ventures.”
The international aviation playing field has never been level; rather, it has always had “bumps and hills,” Byerly said. Open Skies allow the market to function as freely as it can in such a regulated industry, he said.