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Saturday, October 23, 2021

US travel industry defends Qatar Airways, UAE carriers in subsidy spat

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A Qatar Airways A350
A Qatar Airways A350

Coming out in support of the Gulf carriers, a coalition of American tourism businesses has urged its government to reject demands from the country’s largest US airlines to limit the expansion of Qatar Airways, Emirates and Etihad.

The move was made by some of the largest hotel chains and conference organizers in the US, and highlighted the continued debate there over whether the expansion of foreign airlines benefits or harms the country’s economy.

Photo for illustrative purposes only.
Photo for illustrative purposes only.

The major US carriers – American, Delta and United – have accused the Gulf airlines of receiving government subsidies that allow them to compete unfairly.

The American airlines have asked the US government to renegotiate its Open Skies agreement with Qatar and the the UAE, which currently allows government regulators to determine the frequency and capacity of flights.

All three GCC airlines have denied the unfair competition accusations.

Qatar Airways, however, has not yet provided a detailed response to the specific allegations that it has received US$16.5 billion worth of forgiven loans, free land, grants and other forms of support from the Qatar government since 2004.

Don’t change policy

On Thursday, the U.S. Travel Association sent a sent a letter to several top US officials, including the Secretary of Transportation and Secretary of Commerce, expressing its support of the current Open Skies agreement.

It urged officials not to reopen the international aviation deals with Qatar and UAE, and said that the Gulf airlines actually provide a major boost to the US economy.

The letter was signed by the heads of Hawaiian Airlines, Alaska Airlines and JetBlue Airways, as well as several major hotel chains including Hilton, Intercontinental and Marriott, who say the expansion of the Gulf carriers in the US has led to a dramatic boost in tourism-related business.

In a statement, U.S. Travel president and CEO Roger Dow said:

“I wake up every morning alarmed and sad that the Big Three (US airlines) have staked out this position on Open Skies. Even if I tried hard I couldn’t think of a policy change that would be as utterly terrible for the economy, jobs and consumers.”

Winners and losers

While the major US carriers and their unions argue that the US is losing jobs due to the “subsidized competition,” several American businesses have benefited from the dramatic growth of the Gulf airlines.

Boeing 787 Dreamliner
Boeing 787 Dreamliner

That includes airplane manufacturer Boeing, which has supplied Qatar Airways with 67 planes to date and received orders for nearly 150 more, according to the Gulf carrier.

“We truly believe in open skies,” said Marty Bentrott, Boeing’s senior vice-president of international sales, according to Gulf Business.

In addition to connecting US cities to new international destinations, making the country more attractive to tourists and helping American hotels fill their rooms, the Gulf carriers have added more competition to existing routes.

According to the U.S. Travel Association, Delta, United, American Airlines and their global alliance partners currently control three out of every four transatlantic flights to and from the US.

By adding additional flights, the Gulf carriers have helped push down fares to the benefit of passengers, the industry association argues.

Critics, however, warn that the low fares won’t last. The large US airlines say that they’ll be forced to reduce service if they continue to be undercut by the Gulf carriers. This, they argue, would ultimately give Qatar Airways, Emirates and Etihad the market power to set higher fares.

Investigation

The US government is currently accepting submissions from the public to respond to the allegations made by the major US airlines and has not set a cut-off date for comments.

But while its investigation does not show any signs of imminently concluding, Qatar Airways CEO Akbar Al Baker said last week that one of his US competitors has started to take action on its own and accused it of actively trying to hinder its business in the US.

Qatar joined the oneworld alliance in October 2013.
Qatar joined the oneworld alliance in October 2013.

He told the Wall Street Journal that American Airlines was withholding information on its bookings system that was hindering the proper transfer of passengers between the two carriers.

He also accused the US carrier of blocking its new A350 from accessing the terminals at JFK airport in New York and threatened to withdraw from the oneworld alliance, of which both Qatar Airways and American Airlines are members.

An American Airlines spokesperson told the WSJ that the constraints on allocating new gate space at JFK was unrelated to the trade dispute.

Thoughts?

24 COMMENTS

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Saleem
Saleem
6 years ago

These hotels and airlines have no idea what they are talking about, only a few weeks ago I read the expert opinions of DN Human RIghts defenders, who made comments that directly contradict what the aforementioned had said above. Do they not realize that DN HR defenders understand their business and their economy better than they do? Sheesh!

MIMH
MIMH
6 years ago
Reply to  Saleem

It’s all to do with self interest, especially in the cut throat world of american business. If workers are exploited by QA they couldn’t care less as long as they get the passengers to stay in their hotels, buy American goods and gamble in their casinos.

Spirit
Spirit
6 years ago
Reply to  MIMH

What about Hawaiian Airlines, Jet Blue and Alaska? Could this also have something to do with the cartel the big 3 US airlines have created (Delta etc) and which they now want their government to protect?

MIMH
MIMH
6 years ago
Reply to  Spirit

Look at the sectors they serve. If the gulf carriers weaken the big airlines in America then they stand to benefit and they won’t be hurt by the field carriers operations.

Spirit
Spirit
6 years ago
Reply to  MIMH

That won’t happen if those airlines stop treating passengers like diseased cattle that they herd into tiny spaces with minimal entertainment and shameful food service. Oil prices have declined considerably but service has only gotten worse.

qatari
qatari
6 years ago
Reply to  Saleem

i hope when those ” defenders” see this article , and acknowledge that their irrational points make no sense , three sects are benefiting from QA,other GCC airlines , (tourism , airlines & airports ,aircraft manufacturers , hotels , etc ) & defending the the cartel the big 3 US airlines that offers almost nothing in compare (lets not say aircrafts since they are old companies ) at least a decent humane services & not sucking every bit of money you have on their services . ( some will charge you now for an aisle & window seats 🙁

Anonymouse
Anonymouse
6 years ago
Reply to  Saleem

I wasn’t aware that Human Resources needed defending?

Spirit
Spirit
6 years ago

This is not the first time we are hearing aircraft manufacturers support Open Skies (re: Boeing who support the Gulf airlines because the region has been lucrative for them).

Saleem
Saleem
6 years ago

Hey where the DN airlines experts at? You guys were all over the place with your smart opinions when Akbar talks, now you’re silent? LOL!

ShabinaKhatri
ShabinaKhatri
6 years ago
Reply to  Saleem

Deleting for picking a fight.

onthefence
onthefence
6 years ago

Can’t truthfully say that I have flown on many US airline flights but the ones I have were not good. It seems to me that the situation is very much the same as the US car industry and the British motorcycle industry, when competition arrives any business should take that competition seriously and not sit back and try and rely on reputation alone.
When the japanese motorcycles first arrived in the UK no one took them seriously and it ultimately led to the demise of UK bike manufacturing, how many japanese cars are now imported into the US as american models did not offer the same luxuary as standard, and they have paid the price with loss of sales.
All american carriers need to look hard hard at what they are offering and listen to their customers instead of bleating about unfair competition, the customer is always right, so the saying goes.

qatari
qatari
6 years ago
Reply to  onthefence

so true , Im Qatari but to be fair not a big fan of QA for they way they over charge ppl ,but the ( airplanes , services ,staff ) are way better than most EU,US operating airlines. so at least im getting something .

bleh!!
bleh!!
6 years ago
Reply to  qatari

i would agree to the over charging part…just paid 9800QR for my family (3 people- son aged 1 yr) to India traveling economy class via QR!

qatari
qatari
6 years ago
Reply to  bleh!!

you should have got a transit flight , most QA transit flights are cheaper , when your traveling direct from Doha its always high .

bleh!!
bleh!!
6 years ago
Reply to  qatari

I know but those were full too! if i had any other option i would have gone for a transit flight…plus some of them were transiting for more than 3 hrs. especially etihad was transiting for 9 hrs!

qatari
qatari
6 years ago
Reply to  bleh!!

its always the case with QA , direct flight can coast you up to 3times the transit one.

bleh!!
bleh!!
6 years ago
Reply to  qatari

you know whats amazing is that the same trip via QA in december costs the cheapest of all the airlines at this time!

qatari
qatari
6 years ago
Reply to  bleh!!

maybe they want ppl to book them as their connection ,its the holiday season then . & your talking about almost 6 months from now, so usually you can get offers on flights you make way ahead of time.

sicti
sicti
6 years ago

Indeed, Hawaiian Airlines and Alaska Airlines are major players in air travel industry, their opinion is critical :))))

whitesox
whitesox
6 years ago

emirates is top notch! hands down!

Reem
Reem
6 years ago

American, Delta and United — the three stooges of the airline industry. They should improve their airlines, and stop operating like cattle cars. And stop crying.

QA and or her airlines are not cheaper, but just better!

Reem
Reem
6 years ago
Reply to  Reem

I mean QA and other airlines…..

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