Does EU Decision On Persian Gulf Airlines Help US Efforts?
Illustration courtesy of Thinkstock
Did Tuesday’s decision by the European Union to negotiate new aviation agreements with the governments of Qatar and the United Arab Emirates breathe new life into U.S. efforts to halt the growth of Gulf airlines?
American, Delta and United airlines certainly hope so.
The U.S. Big Three were buoyed by the news that European Union governments gave EU transport chief Violeta Bulc permission to negotiate with the UAE and Qatar, which have been accused of violating the spirit of Open Skies agreements by allegedly giving government subsidies to Emirates, Etihad and Qatar airlines.
The U.S.-based trio of airlines has alleged its Gulf counterparts have accepted a combined $42 billion in subsidies over a 10-year period.
According to Bloomberg News, European transport ministers meeting in Luxembourg included a provision on financial transparency in the negotiating mandates for Bulc, targeting any market-distorting aid to Emirates, Etihad Airways and Qatar, and also included similar mandates for agreements with Turkey – Turkish Airlines has also grown substantially in the last decade – and the Association of Southeast Asian Nations.
“These agreements will offer new business opportunities to the whole aviation sector, new routes and better fares to passengers, while guaranteeing a level playing field to our companies,” Bulc said in a statement.
American, Delta and United have been fighting that fight for more than a year now as they and their umbrella lobby group, the Partnership for Open & Fair Skies, await a decision by the Obama administration to pursue similar negotiations.
Jill Zuckman, chief spokesperson for the Partnership, released the following statement regarding the EU decision: “The E.U. has felt firsthand the devastating impact that the subsidy-fueled Persian Gulf airlines’ rapid expansion has had on European aviation markets, just as we’ve experienced here in the U.S. We applaud the Council of the European Union for taking an important step to address the Gulf carrier subsidies that are distorting the marketplace, forcing route cancellations and threatening jobs across the world. It’s time to put a stop to these massive subsidies once and for all and level the playing field for airlines and their workers across the globe.”
But, just like in the U.S., there is division in the EU among the four largest countries. Germany and France are proponents of open skies and new agreements; Britain and Italy, whose largest carriers have ownership stakes by Gulf airlines, are opponents of the talks.
In America, the U.S. Airlines For Open Skies group, which includes JetBlue, Hawaiian and the cargo carrier FedEx, all want to keep the current open skies agreements. In its own letter to the administration, the group wrote: “Ultimately, the Big 3 are not asking the U.S. government to enforce the rules as outlined in our agreements, they’re asking it to break the rules to limit competition. If the Big 3 are successful, not only will they have cut off a major flow of foreign tourists, but they will have opened the United States up for retaliation in a way that could put at risk the savings and efficiencies that benefit U.S. travelers.”
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