Qatar Airways backed by US airlines before country’s government
In the long-lasting trade conflict between the United States legacy carriers and the Gulf big trio, some U.S. airlines are stepping up to advocate for Qatar Airways, arguing that government interference might cause retaliation, which could seriously harm their own expansion plans to Europe.
The newest round of the long-lasting conflict revolves around the Italian carrier Air Italy and its new flights to the U.S. The carrier, previously known as Meridiana, is partly owned by Qatar Airways, which has a 49% stake in it. For American Airlines (A1G) (AAL) , United and Delta, as well as some U.S. senators, this is a sign that the Gulf carrier is using Air Italy to “violate” the Open Skies agreement between the U.S. and Qatar.
However, not all U.S. airlines share the sentiment. CEOs of three airlines ‒ FedEx, JetBlue (JBLU) , and Atlas Air Worldwide ‒ have sent a letter to Secretary of State Mike Pompeo and Secretary of Transportation Elaine Chao, defending Air Italy’s rights to fly to the country.
The letter, dated April 16, 2019, “comes in response to an increase in the disinformation campaign” and aims to set “the record straight about wholly-unsubstantiated claims about Air Italy’s flights into the U.S.”.
In the letter, the airline CEOs also argue that Qatar’s investment in Air Italy does not breach previous agreements and does not violate Open Skies agreements between the U.S. and EU, or the U.S. and Qatar.
“Should the U.S. breach the U.S.-Qatar agreement by restricting Qatar Airways’ rights into the U.S., or the U.S.-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” ‒ US Airlines for Open Skies letter to Secretaries of State and Transportation.
The airlines are afraid of a possible retaliation, if the U.S. government restricts Qatar Airways or Air Italy from flying to the country. “For JetBlue (JBLU) , who just announced its intention to begin service to London from New York City and Boston starting in 2021, the possibility of retaliation could have a devastating impact on the ability to obtain authority to operate in the EU under the U.S.-EU Open Skies agreement,” the text reads.
The latter was signed b Fred Smith, Chairman and CEO of FedEx, Robin Hayes, CEO of JetBlue (JBLU) , and Bill Flynn, President and CEO of Atlas Air Worldwide – each a member of the U.S. Airlines for Open Skies Coalition (USAOS). It comes after the question was raised at the U.S. Senate Foreign Relations Committee on April 10, 2019.
At the time, senator Bob Menendez discussed Qatar Airways’ stake in the Italian carrier, stating that the latter’s flights to U.S. “runs directly counter to the one-year agreement”. Secretary of State said he is “personally engaged in this issue”, adding that “the US government sees what’s going on, and we’re working to put this agreement- we think it was a good agreement and we’re trying to ensure it’s enforced”.
Partnership for Open & Fair Skies, a coalition representing Delta, United and American Airlines (A1G) (AAL) , among other aviation bodies, have complimented the short discussion. “We sincerely appreciate that President Trump and Secretary Pompeo are carefully examining Qatar Airways’ stake in Air Italy. We’re also grateful for the broad congressional support for ending trade violations that harm American airline workers, and for the members of Congress who continue to call for action,” Scott Reed, Partnership for Open & Fair Skies, is quoted as saying in a statement on April 10.
American, United and Delta have long accused Qatar Airways (as well as Emirates and Etihad) of receiving government subsidies. A thaw in the long-running feud over unfair competition was seemingly reached at the beginning of last year when in January 2018, the President Trump’s administration and the Qatari government reached an agreement to settle the dispute on air transport issues between the two countries.
Under the agreement, Qatar Airways was to commit to complete financial transparency and disclose detailed financial information of its state-owned enterprise. The carrier also pledged not to launch any more “fifth freedom” flights to the U.S., settling for routes that originated only from Qatar. A similar agreement was made between the governments of the U.S. and the UAE in May.
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