FedEx chairman and CEO Fred Smith has joined with the CEOs of Atlas Air Worldwide and JetBlue Airways to strongly rebuke an open letter to US President Donald Trump from the CEOs of American Airlines, Delta Air Lines and United Airlines claiming that Qatar Airways’ stake in Air Italy breaches the US-Qatar Open Skies agreement.

American CEO Doug Parker, Delta CEO Ed Bastian and United CEO Oscar Munoz published an advertisement in the New York Times April 16 calling on Trump to “hold Qatar accountable” for allegedly subsidizing Air Italy’s expansion into the US, saying the Gulf carrier’s 49% stake in the Italian airline “represents a grave threat to American jobs and the health of the airline industry.”

“While we hoped [the January 2018 US-Qatar Understandings] would hold Qatar accountable and force its heavily subsidized airline, Qatar Airways, to follow the rules and stop hurting American workers, that did not happen,” the three CEOs said. “No rule-abiding business can compete with a massively subsidized airline that ignores economic realities and can wipe away losses with one infusion of government cash after another,” they added.

The controversy centers on Qatar’s 49% stake in Air Italy—formerly the Italian regional carrier Meridiana—that the three US carriers, lawmakers and Trump administration officials have characterized as a means for the Gulf nation to circumvent its commitment not to initiate new fifth freedom flights to the US. The letter follows Air Italy’s announcement last week that the carrier is launching new routes to Los Angeles and San Francisco, as well as additional flights to Miami.

On April 17, FedEx’s Smith, Atlas CEO Bill Flynn and JetBlue CEO Robin Hayes responded to the Parker-Bastian-Munoz advertisement with a letter to US Secretaries of State and Department of Transportation Mike Pompeo and Elaine Chao.

Characterizing the American/Delta/United campaign as a “disinformation campaign being waged by opponents” of the US Open Skies agreement and Records of Discussion with Qatar and the United Arab Emirates, Smith, Flynn and Hayes write, “With all of these false claims being pushed, we believe the time has come to set the record straight.”

The CEOs state, “We are especially concerned by the latest efforts to distort the Understanding even further with a wholly unsubstantiated claim that the Understandings control Qatar Airways’ minority investment in Air Italy, a legally certified carrier. This false characterization of Air Italy’s flight as ‘de facto’ 7th freedom flights is contrary to established international law. The Air Italy flights in question would be legally permitted 3rd and 4th freedom flights operated by an EU carrier under the US-EU Open Skies agreement.

If one were to accept this logic, Delta’s 49% investment in Virgin Atlantic would mean that Virgin’s flight from London to Dubai is a Delta 7th freedom flight. Further, American’s investment in state-owned and state-supported China Southern would turn flights from Beijing to Guangzhou into cabotage by American.”

They point out that Air Italy’s ownership structure was reviewed and approved by the Italian Civil Aviation Authority and the European Commission and it does not violate either the US-EU or US-Qatar Open Skies agreements.

“Should the US breach the US-Qatar agreement by restricting Qatar Airways’ rights into the US, or the US-EU agreement by restricting Air Italy flights, we can expect to see a rapid unraveling of hard-fought aviation rights around the world when other governments take similar action to shield their state-owned airlines from competition.  Undoubtedly, closing access to global markets will be a punishment that brings higher prices and fewer choices for American travelers, consumers, and shippers.  It would also invite retaliation against US airlines that have used Open Skies and 5th freedom rights to build their thriving global networks – and upon which hundreds of thousands of American jobs depend,” Smith, Flynn and Hayes write. “Retaliation would also have a crippling impact on US passenger carriers seeking new service to the EU and halt any ability to bring down ticket prices in the outrageously expensive transatlantic market.”

New York-based JetBlue announced last week it intends to launch transatlantic service, starting with flights to London from New York JFK and Boston in 2021.

The American/Delta/United campaign has also brought criticism from Business Travel Association chairman Kevin Mitchell, who writes in an ATW op-ed that the reason those airlines have not appealed to the EU is because “they know the Air Italy venture falls squarely in line with many other of their own investments.”

“Their alleged ‘case’ against Air Italy is nothing more than anticompetitive subterfuge bereft of any basis in fact or law,” Mitchell wrote.

But US senator Ted Cruz (R-Texas), chairman of the Senate Commerce Committee’s aviation and space subcommittee, has indicated plans to schedule hearings into Qatar’s business practices, including its stake in Air Italy, sometime in May.

Karen Walker, karen.walker@informa.com

Ben Goldstein, Ben.Goldstein@aviationweek.com