US airlines step up attack on Middle East carriers

Leaders of the three largest US airlines have stepped up their attack against Middle Eastern competitors that they said get unfair government subsidies.

The CEOs of American Airlines, Delta Airlines, and United Airlines, made a rare public appearance together on Friday at the National Press Club in Washington to detail their claims.

American’s Doug Parker said Emirates, Etihad Airways and Qatar Airways have expanded service to the US by 25 percent since the dispute broke out in January. He accused them of rushing to expand before the US government blocks new flights.

United’s Jeff Smisek said US airlines can compete against foreign rivals but not against the governments and energy riches of Qatar and the United Arab Emirates.

Delta’s Richard Anderson flatly denied a countercharge that the US airlines receive subsidies.

The US airlines charge that three big and fast-growing Middle Eastern carriers have stayed afloat by receiving more than $42bn in subsidies from their governments since 2004.

They want the Obama administration to renegotiate treaties that allow airlines from Qatar and the United Arab Emirates to fly to the US. And they want to block those airlines from adding new flights to the US.

Emirates, Etihad and Qatar Airways deny they are subsidised, and they accuse the US airlines of hypocrisy. On Thursday, Etihad put out a study claiming that American, Delta and United have received $70bn in government help since 2000.

“We will prove clearly there is no harm from our market position,” Katie Connell, a spokeswoman for Etihad, said on Friday. She said that her airline expands markets instead of simply poaching customers who used to fly on another airline.

The fight has gotten nasty. A few weeks ago, the Delta CEO invoked memories of 9/11 against the Middle Eastern carriers; Qatar Airways CEO Akbar al-Baker fired back that Delta flies “crap” older planes.

It is unclear when the Obama administration might decide whether to reopen negotiations over the air-travel treaties with Qatar and the United Arab Emirates or freeze their flights to the US.

The US airlines say administration officials are looking at their arguments seriously.

For many air travellers, the dispute may be difficult to grasp. It pits US airlines that are making record profits against Gulf carriers rich enough to place huge orders for new jets.

The battle lines are a bit blurry, too. Some US consumer groups are siding with the Gulf airlines, arguing that competition will push fares down. So is JetBlue Airways, which has partnerships with Emirates, Etihad and Qatar.

Those three rarely compete directly on routes with American Airlines, United Airlines and Delta Air Lines, but they compete heavily with the US carriers’ European partners including Air France and Lufthansa.

US airlines share revenue from some flights with those partners, and they argue that subsidised airlines will eventually do great harm to them.

Those who oppose American, Delta and United in this fight, Parker said, “either don’t understand that or don’t care about US commercial aviation”.