U.S. Airlines Attack UAE, Qatar Airline Subsidies

Three top U.S. airlines groups accused Qatar and the United Arab Emirates Thursday of lavishing $42 billion in subsidies on their airlines to wrest business from competitors.

The U.S. carriers together with workers' groups issued a 55 page report detailing how "unfair" subsidies given to Gulf rivals Qatar Airways, Etihad Airways and Emirates have allowed them to wrest market share from the U.S. industry.

They called on the U.S. government to raise the issue with the governments and urged changes to the bilateral commercial aviation agreements with them.

"The multi-billion dollar subsidies... have allowed Qatar Airways, Etihad Airways and Emirates to rapidly expand their fleets and international routes, distorting the commercial marketplace to the severe detriment of U.S. employment, the U.S. economy and the U.S. airline industry," the U.S. group said.

American Airlines, Delta Airlines and United Airlines along with U.S. pilot and airline labor groups said the three Gulf fliers have benefitted unfairly from huge interest-free loans, subsidized airport charges, government protection on fuel losses, and below-market labor costs that are considered unfair subsidies under the World Trade Organization.

The report said that, with the backing of state support, the Gulf airlines are targeting more international traffic to the United States on the back of the U.S. "Open Skies" aviation agreements with Qatar and UAE.

It noted their huge share of orders for widebody aircraft, representing about one-quarter of the entire global fleet of widebody aircraft.

"Because the Gulf carriers are adding this new capacity at rates that substantially exceed global GDP growth -- which drives growth in demand for air transport services -- the only way to accomplish this feat is to continue taking passengers from other countries' carriers," they said.

They called on the U.S. government to open new talks over the air agreements to address what they said are violations of those pacts, and pressed for changes.

"The Open Skies agreements conferred enormous benefits on Qatar and the UAE by opening the most lucrative market in the world to their airlines," the group accused.

If Qatar and UAE refuse to address the problems, they recommended, the U.S. should move to terminate the agreements and negotiate new deals based on "principles of comity and reciprocity," the U.S. group said.