WAR OF WORDS
“If you don’t level the playing field, jobs will flow from the US to the Gulf. It certainly won’t be good for the consumer if we start flying less and they fly more, then you will start seeing those fares going up over time.”
Doug Parker, CEO, American Airlines
“We have found documented evidence, that can’t be refuted, of tens of billions of dollars in direct government subsidies. The UAE and Qatar cannot deny huge government subsidies. It’s about fair competition.”
Richard Anderson, CEO, Delta
“We will compete with any company, but we can’t compete with states. Bilateral agreements [with Qatar and the UAE] must be reviewed and must be renegotiated.”
Carsten Spohr, CEO, Lufthansa Group
“It is ironic that in the home of free competition, a market in which we account for only a tiny fraction of one per cent of international departures, we have instead been attacked.”
James Hogan, CEO, Etihad Airways
“I am surprised that the three largest US carriers – each of which was a beneficiary of America’s unique Chapter 11 bankruptcy reorganisation law – have presented a case against Open Skies access for some airlines, including Emirates, based on claims of subsidies.”
Sir Tim Clark, president, Emirates Airline
“It is worrying to see protectionism rearing its head again.”
Willie Walsh, CEO, International Airlines Group 58 BBT JULY/AUGUST 2015
doubling capacity to Boston and Seattle, upscaling its Milan-New York service to an Airbus A380 and announcing a new route to Orlando. Qatar Airways meanwhile announced plans for new routes from Doha to Atlanta (Delta’s home hub), Boston and Los Angeles, and moving New York to double daily. Assuming these routes do all go ahead, both Emirates and Qatar will then cover ten US cities each, non-stop, from their hubs. Etihad is close behind with six.
SUBSIDY SLINGING The war of words revolves around the question of state aid to the Gulf carri- ers, with the Big Three claiming their three rivals have received US$42 billion worth of fuel, infrastructure and other government subsidies in the past decade. The mud was then slung in the other direction, with the Gulf trio claiming the Big Three had received almost US$71.5 billion in US government subsidies since 1999 – such as US$761 million given to Delta by the state of Minnesota to build a fleet maintenance facility – and pointing out that each was allowed to recover from bankruptcy after the 9/11 attacks rather than be allowed to collapse, as the free market would normally dictate. Casting the state aid question aside, can the US carriers really complain? In the bigger scheme of things, 4.3 million seats remains a drop in the ocean compared to the size of the total US market and, whichever side of the Atlantic you sit, it can be argued that the US airlines seem to be getting ready to rumble after spending decades all but ignoring the Gulf region. The US carriers have never really aimed to feed the Gulf hubs or any other outside Europe – only Dubai is served, by United from Washington and Delta from Atlanta. American Airlines, for example, has so far declined to fly to Doha despite Qatar Airways becoming a fellow Oneworld member in October 2013. Nowhere, it seems, is there anything remotely like the successful partnership between Emirates and Qantas on the table. OAG illustrates how the US airlines
have missed the opportunity in the Middle East. In one week in April 2010, US airlines operated 8,800 seats to and from the Gulf, while the Middle East carriers flew 43,000. Five years later, the US figure had actually fallen – to 7,800 – while the Gulf carriers’ total has soared to 131,000. As for Australia/Pacific, Africa and South Asia, all regions where the Gulf
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