New US Airline Group Backs Gulf Open Skies

August 3, 2015

A challenge by US airlines that accuses three Gulf carriers of distorting competition via government subsidies has taken another turn with the formation of a US airline group that backs the Gulf-carriers' cause.

Four long-time supporters of US Open Skies agreements with Qatar and the United Arab Emirates, which remove restrictions on flying to and from those states, have formally banded together to create the US Airlines for Open Skies Coalition. They are Atlas Air, Hawaiian Airlines, JetBlue Airways, and the air cargo unit of FedEx.

"We thought it was important that the government understand that there are many different voices in this choir," JetBlue's general counsel, James Hnat, told reporters in announcing a letter from the group to the Obama administration.

The letter came just hours before the US government closes a public comment period on August 3 asking for views on whether Emirates, Etihad Airways and Qatar Airways have dumped capacity and begun pushing competitors out of key markets via USD$42 billion in subsidies over the past decade.

Each Gulf carrier has denied the subsidy claims.

A coalition representing American, Delta, United and seven airline unions - known as the Partnership for Open and Fair Skies - has called on the Obama administration to initiate consultations with the Gulf states to address the alleged subsidies.

The Partnership's spokeswoman, Jill Zuckman, called the new US group "a meaningless coalition without a cause." A majority of comments submitted to the US government have backed the Partnership, according to the group.

The carriers in the new coalition have benefited from the Open Skies agreements in question: for example, FedEx Express has a hub in Dubai, and JetBlue has seen a boost in passenger traffic from a relationship with Emirates that feeds the New York-based airline many international customers.

(Reuters)