Last updated: 09:39 PM ET, Tue April 21 2015

US Airlines Publicly Release Details of Gulf Subsidy Report

Airlines & Airports | American Airlines | Rich Thomaselli | April 21, 2015

US Airlines Publicly Release Details of Gulf Subsidy Report

Well, the Gulf airlines asked for it, and they’re going to see it.

The Partnership for Open & Fair Skies, the advocacy group for the three major U.S. airlines in their fight against the Gulf carriers and government subsidies, today released the financial documents it used to build a case claiming Emirates, Etihad and Qatar airlines have violated the Open Skies Agreement.

The Gulf carriers have been asking for a more detailed look at what American, Delta and United airlines used to form the 55-page report it sent to the Obama administration in January. In this report, the U.S. carriers asked the government to investigate $42 billion in subsidies from the United Arab Emirates and Qatar governments given to the Gulf carriers over the course of 10 years.

The U.S. government agreed earlier this month to look into the matter.

“With the U.S. government now investigating the Gulf carriers’ massive subsidies, Qatar Airways, Etihad Airways and Emirates must open their books and offer the same level of financial transparency that U.S. airlines provide,” Jill Zuckman, chief spokesman for the Partnership for Open & Fair Skies, said in a statement.

Spearheaded by Delta’s initial hiring of a forensic accounting firm to look into the financial records of the Gulf airlines, the two-year investigation yielded more than 1,000 pages of documents.

“The information in the financial records already in the possession of the U.S. government provide indisputable proof that Qatar and the UAE are funneling massive amounts of money into their state-owned airlines in a calculated effort to undermine Open Skies policy and any semblance of fair competition,” Zuckman said. “We believe that the $42 billion in subsidies and other unfair state benefits that our investigation uncovered is just the tip of the iceberg.”

The financial records released today formed the basis for the Partnership’s white paper, Restoring Open Skies: The Need to Address Subsidized Competition from State-Owned Airlines in Qatar and the UAE. The newly released Gulf carrier financial records are available on the Partnership’s website.

In the meantime, on April 17, American Chief Executive Officer Doug Parker, Delta CEO Richard Anderson and United CEO Jeff Smisek sent a letter to the Obama administration asking for an immediate freeze on Gulf carrier routes while the matter is being investigated.

Emirates, Etihad and Qatar are adding new routes almost weekly in what appears to be a mad dash for new business before the public comment period of the investigation ends next month.

“It is now apparent that the Gulf carriers are taking advantage of this delay to change the facts on the ground, rushing to add new wide-body service in an attempt to gain even more market share before the U.S. government acts to counter their subsidized expansion,” the CEOs wrote.


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