US Airline Response To Gulf Open Skies Firming

April 15, 2015

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Potential changes to US Open Skies agreements with Qatar and the United Arab Emirates could involve new rules on price-lowering and capacity-dumping, Delta Air Lines chief executive Richard Anderson said.

The remarks during a conference call on the company's earnings represented one of the clearest statements yet by US airlines on what they hope talks between the US and the Gulf states would achieve if they take place.

Delta and other US airlines have charged their Gulf competitors with receiving more than USD$40 billion in subsidies from their home governments. This, they say, has allowed them to lower prices and begin pushing US airlines out of key markets.

Emirates, Etihad Airways and Qatar Airways have denied the allegations, saying US carriers have lost market share because of inferior service.

"We're in the process of answering questions (from the US government)," Anderson said, "and the end result needs to be like the Chinese steel case or agricultural cases that the US frequently brings (to the WTO), where you come up with remedies that will address a subsidy."

The Obama administration on Friday solicited comments on the debate and said it expected to begin reviewing submissions by the end of May.

The US government has not indicated whether it would discuss the subsidy claims with Qatar and the UAE.

(Reuters)