BUSINESS

U.S. airlines say Persian Gulf-based carriers got billions in subsidies

Flight attendants labor leader says U.S. airlines can't compete with oil-rich gulf nations'

Three of the largest U.S. airlines have accused competitors from the United Arab Emirates and Qatar of accepting $42 billion in government subsidies, giving the Persian Gulf-based airlines an unfair competitive advantage.

American, Delta and United Airlines, along with several U.S. labor groups, say they are presenting evidence of the subsidies to the Obama administration in hopes the government will renegotiate an agreement on international air travel called the Open Skies policy.

The U.S. airlines say the $42 billion in subsidies over the last decade, in the form of free land, government assumption of fuel-hedging losses and loans with no repayment obligation, are helping state-owned Qatar Airways, Etihad Airways and Emirates expand into the U.S.

"We welcome an open global marketplace that drives innovation and service," said Doug Parker, chief executive of American Airlines. "But the playing field must be level or U.S. airline jobs will be lost to airlines that are subsidized by their government."

Laura Glading, president of the Assn. of Professional Flight Attendants, agreed, saying: "I believe U.S. airlines can go toe-to-toe with any airline in the world but I do not think we can keep up with the governments of oil-rich gulf nations."

The three airlines from Qatar and United Arab Emirates have denied receiving government subsidies and have charged that U.S. carriers have themselves received government assistance in the form of bankruptcy protection and loan guarantees after the Sept. 11, 2001, terrorist attacks.

In a statement, Tim Clark, president of Emirates Airline, said he has only recently received the report from the U.S. airlines and "we will provide a response when we’ve had the opportunity to fully review the allegations."

He added the airline was "confident that any allegation that Emirates has been subsidized is totally without grounds.”

The feud over the subsidies took an ugly turn last month when Delta CEO Richard Anderson made a comment that suggested that the Qatar and UAE governments played a role in the Sept. 11 attacks. He later apologized for the comments.

To read more about travel, tourism and the airline industry, follow me on Twitter at @hugomartin.

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