US Airlines urge regulation on Gulf carriers receiving ‘unfair’ government aid

Published May 17th, 2015 - 04:00 GMT

US airlines have urged policymakers to regulate Arabian Gulf carriers after their rivals expanded in the US by 25 percent this year, saying their competition has seen the benefits of "unfair" government aid, Bloomberg reported.

Chief executive officers of the three US carriers — American, Delta and United — said they expect US regulators to have a talk with Qatar and the UAE about their possible violation of Open Skies agreements by providing their carriers with $42 billion of government subsidies.

The US airlines said the aid is being used to increase US flights and offer discounts to gain more international traffic. The Gulf carriers have repeatedly denied the claim. 

"I'm highly confident they'll take action because the evidence is so compelling and it cannot be ignored," American CEO Doug Parker said at the National Press Club in Washington, according to Bloomberg.   

Emirates, Qatar Airways Ltd. and Etihad Airways PJSC have denied that they have received $42 billion in government subsidies. But the US carriers have been urging regulators on the matter for two years.

While the original goal was for the Gulf carriers to stimulate more international traffic, the US carriers said the international companies have instead taken business away from the US airlines. 

“The gulf carriers have failed to meaningfully stimulate new traffic to and from the United States,” economic consultant Compass Lexecon said in a study released by the Partnership for Open and Fair Skies. “As a result, the traffic gains enjoyed by the Gulf carriers due to their subsidised expansion to the United States and elsewhere have come at the expense of US and other carriers.”

The US companies said they would take their case to Congress if US President Barack Obama's administration doesn't move to curb the Gulf carriers' growth. 

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