Obama gov't not moving quick enough in row with Gulf carriers, say US rivals

“We are concerned there isn’t enough urgency in the process,” American Airlines CEO claims

(Getty Images)

(Getty Images)

The three US airlines accusing Gulf airlines of having received billions of dollars of government subsidies have ramped up pressure on the Obama administration to take action over their claims.

The US airlines are lobbying the US government to prevent Gulf carriers Emirates, Etihad and Qatar Airways from launching new routes to the US until a review of open skies agreements has been conducted.

American Airlines chief executive Doug Parker told a National Press Club forum in Washington on Friday: “I’m highly confident they’ll take action because the evidence is so compelling and it cannot be ignored.”

“We are concerned there isn’t enough urgency in the process,” he was quoted as saying by The National newspaper.

Also at the event, Delta chief executive Richard Anderson said the three airlines would take their cause to congress if the Obama administration did not limit growth by the Gulf carriers.

The row over subsidies allegations continues with both sides making fresh claims and defences on an almost weekly basis. 

A report released on Friday by the Partnership for Fair and Open Skies, which represents American, Delta and United airlines, it claimed Gulf carriers had expanded in the US by 25 percent this year, eating up existing passenger traffic without growing overall numbers.

Meanwhile, Etihad Airways released its own report last week, research commissioned by the Risk Advisory Group that showed US airlines have received $71.48 billion of benefits, more than $70 billion of which has been since 2000, enabling them to recover from the verge of bankruptcy to become the nation’s largest carriers with multi-billion dollar profits.

Jim Callaghan, general counsel and company secretary of Etihad Airways, said: “We do not question the legitimacy of benefits provided to US carriers by the US government and the bankruptcy courts.

“We simply wish to highlight the fact that US carriers have been benefiting and continue to benefit from a highly favorable legal regime, such as bankruptcy protection and pension guarantees, exemptions from certain taxes, and various other benefits.

“These benefits, which are generally only available to US carriers, have created a highly distorted market in which carriers such as Etihad Airways have to compete.”

The Gulf carriers have denied receiving government subsidies to spur their growth.

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