US mayors pitch against Gulf in airline subsidies row

Leaders of seven large US cities urge Barack Obama to take action over Open Skies policies
By Sarah Townsend
Thu 21 May 2015 02:41 PM

Several US mayors have plunged into the row between Gulf and US airlines over alleged subsidies, urging the Obama administration to investigate the claims.

The three largest US airlines, United, Delta and American, accuse Emirates, Etihad and Qatar Airways of having received $42 billion of government subsidies, which, they allege, has helped the Gulf carriers to gain unfair market share over the past decade and represents a violation of Open Skies polices.

Ralph Becker of Salt Lake City, Daniel Clodfelter of Charlotte, Mike Duggan of Detroit, Rahm Emanuel of Chicago, Annise Parker of Houston, Betsy Price of Fort Worth and Kasim Reed of Atlanta have called on the US government to open consultations with Qatar and the United Arab Emirates.

They argue that a thorough investigation is required to uphold fair competition, the health of the US airline industry and the economic development of their cities.

Mayor Mike Duggan said: “I know firsthand the innumerable benefits that Open Skies policies have brought not just to Detroit, but to the entire country.

“Open Skies agreements have provided enhanced airline service to the public and open and fair competition between airline carriers operating internationally.

“[These agreements] have been integral to the $17.6 billion of economic activity that the commercial airline industry has brought to our state, which is why it is so important that we uphold and adhere to the guiding principles set forth in these Open Skies agreements.”

Mayor Betsy Price of Fort Worth echoed Duggan’s sentiments, saying that the alleged subsidies “have altered the free market framework established by Open Skies and will ultimately have a negative economic impact here in the United States”.

Lobby group the Campaign for Fair and Open Skies claimed that 11 million American jobs and $1.5 trillion in nationwide economic activity are supported by the US airline industry.

Mayor Kasim Reed of Atlanta said: “If U.S. airlines are pushed off of international routes and lose market share to the government-owned Gulf airlines, it will mean American job losses.”

Of the cities represented by the seven mayors, Emirates serves Chicago, Dallas and Houston; Etihad serves Dallas/Fort Worth and Chicago, and Qatar Airways serves Chicago and Dallas/Fort Worth.

The three Gulf carriers deny receiving unfair subsidies from their respective governments.

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