Last updated: 05:22 PM ET, Tue March 17 2015

Australia and Europe Weigh In on U.S.-Gulf Aviation Dispute

Airlines & Airports | American Airlines | Rich Thomaselli | March 17, 2015

Australia and Europe Weigh In on U.S.-Gulf Aviation Dispute

The interested spectators sitting on the sideline of the aviation industry’s latest dust-up are starting to take a rooting interest.

As the three major U.S. airlines ramp up their battle to have the Open Skies Agreement with three major Middle East Gulf carriers renegotiated, other countries have begun to take sides in the dispute.

Australia Trade and Investment Minister Andrew Robb said today that he supports Open Skies, and that his country has “absolutely” benefitted from the Gulf airlines who have helped trade with Australia double in recent years.

"We want seats coming into Australia. If the Arab nations want to subsidize our flying, well, that will be a fact of life and we should take advantage of it, frankly," Robb told the Sydney Morning Herald during the Tourism Australia conference. "My view is that we can't do anything about that."

The three major U.S. airlines – American, Delta and United – last month presented a 55-page report to the Obama administration asking for relief from the current Open Skies agreements. The carriers claim that their counterparts in the Middle East – Emirates, Etihad and Qatar airlines – have received more than $42 billion in government subsidies over the last 10 years.

Robb said accusations about government subsidies for airlines have been around for decades.

But that doesn’t make it right, as far as France and Germany are concerned. Transport ministers from the two European Union countries said in a statement that they want their EU partners and the EU executive Commission "to adopt a common strategy to bring an end to these practices," according to the Associated Press, which added that Austria, Belgium, the Netherlands and Sweden also supported France and Germany’s position.

Etihad CEO James Hogan and his counterparts at American and Delta all spoke today at the U.S. Chamber Foundation’s 14th Annual Aviation Summit in Washington. Hogan characterized Etihad as having been a “David” in a sea of Goliaths, and said any monies the airline received were not subsidies but loans that in fact have to be paid back.

Parker and others bristled at that.

"They are not just owned by their governments – these airlines are arms of the state," Parker said. "Qatar and the U.A.E. subsidize their state-owned carriers. These airlines certainly aren’t independent companies."


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