Game Over: US Government Sides With Gulf Carriers In Open Skies Battle

Since early last year there has been a huge battle between the “big three” US carriers (American, Delta, and United) and the “big three” Gulf carriers (Emirates, Etihad, and Qatar) regarding their Open Skies agreement.

Emirates-A380-First-Class-01

Essentially the US carriers have argued that the Gulf carriers aren’t competing fairly, given that they’re government subsidized.

While I see where they’re coming from in theory, the argument has always struck me as being especially convenient. There are tons of government subsidized airlines out there, so why single out these three carriers? Furthermore, should US carriers really be the ones to call other airlines out for government subsidies, when they’ve benefited from billions of dollars worth of subsidies over the years?

Anyway, there has been a ton of politicking on both sides. US carriers have made the argument that the Gulf carriers are stealing American jobs. Meanwhile on the Gulf side, Qatar’s CEO has lashed out against the US carriers (and especially Delta) endlessly.

Open-Skies

The US carriers have wanted the US government to hear their case in hopes of creating change, and it looks like those talks have now happened. The resolution? The US government will take no action against the Gulf carriers. In other words, they’re siding with the Gulf carriers over the US carriers.

Per The National:

The US government says talks over the Open Skies policy with Arabian Gulf carriers were constructive and ended without any formal action.

The US State Department held talks with Qatar government officials on Monday and with the UAE the week before over charges levelled more than a year ago by the three largest US airlines alleging the Gulf carriers were competing unfairly.

The State Department said, however, that while it looked seriously at the allegations it has taken no formal action.

Ms Thompson said that while “the US government takes seriously the concerns raised by our airlines, we also remain committed to our US Open Skies policy, which has greatly benefitted the travelling public, the US aviation industry, American cities and the broader US economy through increased travel and trade and job growth”.

Well done, Gulf carriers. The US carriers did such an incredibly poor job making their point that they deserved to lose. They made the argument about patriotism rather than about business, and they ended up losing on both fronts.

It’s times like these where I wish Akbar Al Baker had a Twitter account, because I can only imagine he has a lot of choice words for Mr. Anderson & Co. (never mind the fact that he’s retired) right about now.

What do you make of the US government taking no further action in this Open Skies battle?

About lucky

Ben Schlappig (aka Lucky) is a travel consultant, blogger, and avid points collector. He travels about 400,000 miles a year, primarily using miles and points to fund his first class experiences. He chronicles his adventures, along with industry news, here at One Mile At A Time.

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Comments

  1. Terrible. It’s in the interest of everyone for a robust, sound, and prosperous global aviation industry without the distortions of subsidies and unfair competition. But all the armchair analysts here, at VFTW, FT, etc surely know better.

  2. Yet another sell-out by the American government. First they give EK the contract to fly employees to the gulf region (under a bogus codeshare with JetBlue), now this. No wonder Trump is doing so well over the sell-out of American interests to foreign ones! (Perhaps they should have checked out what happened in Australia when EK was let in without restrictions and pretty much destroyed QF, forcing it into abandoning many European routes and replacing them with EK codeshares.)

    If 90% of EY, EK and QR customers originated in their respective emirates, then fine there is a level of reciprocity in the marketplace. As it is, hardly any customers originate from those places and the vast majority are merely transiting through the most subsidized countries in the world! Shame on the Obama regime, selling Americans out one “free trade” decision after the other! At least Bernie convinced the party to reevaluate its position on trade.

  3. lol @DavidB

    Qantas didn’t sell out to EK, Australia has never had the bilaterals in place with EU countries to be able to serve any of the countries of note except the UK and Germany. France and Singapore actively stopped Qantas from flying between the two countries. Qantas also needed to increase fleet utalisation whilst reducing 747’s that were at the end of their lifespan. America has Ch11, the UAE has cheap(er) fuel. New Zealand doesn’t have superannuation (hence JetConnect). You talk about globalisation, but you need to introspect before you can expect others to conform.

  4. It is unfortunate your article is totally based on one media report by the dark side. Did you confirm with US Dos.

    DoS will not announce any action at the meeting with UAE. They will write their opinion to DoT/DoJ.

    Also EK apparently having serious overcapacity issues, probably looking to rightsize the company. So US government may not take any action, but market conditions will.

    Also it is very unlikely EK will take all B777X deliveries.

  5. @DavidB…Tell me, though. Which US airline flies to the gulf that could’ve received a contract to fly employees to the gulf region?

  6. Awesome. Considering Emirates is legitimately profitable and the American carriers enjoy a competition restricted monopoly, it’s about time this happened.

    Anyone who knows how business works (Trump does not) knows this is a good deal.

  7. Emirates should be banned from entering US airspace. If you want to travel to the Middle East then make a connection in London. Let’s make America great Again.

  8. Spot on Lucky.

    Looking forward to spending money and miles for great experiences flying EK, EY & QR!

  9. To all those lashing out at Arabian airlines,you dont like it dont fly it simple as that,stop moaning and vite withbyour wallet evennif that means flying old 767 and 757 and having crackers and carrots in your overcrowded lounge

  10. @Oscar That sounds a lot like the past tense to me. Didn’t Delta also fly to Dubai? But they don’t right now. In order for the US government to get employees to the gulf region they would have to utilize a foreign carrier to get them there at least part of the way. Or, they could just use 1 foreign carrier and get them there directly.

    That Etihad was given a contract for passengers to that region wouldn’t surprise me (If that is indeed the case, as I haven’t corroborated the claim). And, frankly, makes way more sense than using a combination of a US Carrier and their partners.

  11. I don’t hear anyone contradicting the fundamental point made, that they are in fact heavily subsidized, owned and influenced by their respective governments. False equivalence of miniscule tax breaks of US airlines is intellectually dishonest. Subsidies aside, it’s funny how some will boycott Walmart because of how “evil” they are for not paying above market wages, protest Chick fil A for it’s CEO being anti-gay marriage, yet happily fly on the carriers of some of the most oppressive, anti-gay, anti-woman and anti-American regimes in the world. By doing so you are indirectly supporting their regimes, so I hope you can reconcile that within your twisted value system.

  12. This is awesome. Let the Big 3 Middle East replace the big 3 United States. US airlines service are awful, hate talking to their call centers. I hope the big3 Mid-East will have many more flights in the future to Europe, South America, Africa and allover the world via US.

  13. That billboard about lost jobs is a crock given how many servicing jobs US airlines have sent overseas to Mexico themselves.

  14. Oh my. Nationalism always brings out the ugly in arguments. I thought free enterprise meant exactly that. If you can argue for govt support, or tax concessions, or a monopoly on government charter work, or a letter of guarantee on finance, or less compensation for passengers, or lower pay rates, then that was called competition. It’s no good being all whiney when someone manipulates capitalism better than you do.

  15. US Airlines made tons of money and still trying to squeeze more from customers, blame the shareholders. Airline made billions but if it does not matter, if they don’t make more then previous year their stock will tank and that’s the reason CEO and VPs are trying to find a way to make more revenue year-over-year. Oh! next is $5 dollars charge to use the lavatory.

  16. @2paxfly: You are very confused about what free enterprise means. What you describe is close to the opposite of free enterprise. Aside from that, free enterprise is different from free trade between nations, which is at the heart of this issue. You can have free trade between nations that are communist, so the two terms are not the same.

  17. Hilarious. Don’t write about subjects that you’re unfamiliar with. What a rag. This issue is far from over. Talks aren’t even finished yet.

  18. WR, you are right on. I guess I am one who still remembers 9/11. I only hope that the
    a-rab pilots are westernized. But you never know.
    Have wondered why so many a-rab airlines are flying into US airspace? I have hesitation to fly these airlines. Don’t care how good their chocolate dainties are!

  19. In a way it’s sad that the decision will be universally applauded by international travelers, because no one really wants to fly a U.S. flag carrier whenever a foreign carrier also competes on the same route. DL/AA/UA simply cannot compete with these Gulf carriers in terms of comfort and service. I have made many trips from Europe to Asia on Qatar, Emirates and Etihad, and the whole experience was always excellent. In contrast, on my Europe to U.S. flights, I find nothing by crappy service, mediocre food and poor attitudes on U.S. carriers, even in business class.

  20. So US majors seek bankruptcy protection and wipe out billions of liabilities AND start with a clean slate, they have big balls to argue against subsidies for ME airlines

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