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Fri 2 Sep 2016 10:35 AM

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Delta cries foul over JetBlue's US contracts operated by Emirates

US carrier says foreign codeshare partners should never operate US government-funded travel

Delta cries foul over JetBlue's US contracts operated by Emirates

US carriers’ row with their Gulf counterparts has moved up a notch after claims the US Government has breached its own law by awarding federal contracts to JetBlue Airways on flights which are operated by Dubai's Emirates.

The Fly America Act, which has been in existence since 1981, says that all travel paid for by US government federal funds employees must be on a US carrier.

JetBlue, which operates a fleet of Airbus A320s and Embraer 190s, was recently awarded contracts to fly federal employees from New York’s JFK to Milan and Dubai, and because it does not fly to either destination, the contract is operated by its codeshare partner Emirates, which offers direct flights between the destinations.

The contracts were awarded by General Services Administration (GSA), which manages and approves government operations, including travel.

GSA, in a statement to US media, said codeshares are permitted under the Fly America Act and that the contracts awarded to JetBlue were done so on the basis that it offered cheaper fares than the three US airlines.

Delta Air Lines, however, has become incensed over the decision and has written a “letter of concern” through its chief legal officer Peter Carter, and called on the GSA to reconsider its decision.

“This award is for JetBlue in name only, as 100 percent of the flights on the contracted route will be operated by Emirates Airline,” Peter Carter, Delta’s Chief Legal Officer, wrote in the letter.

“JetBlue does not operate long-haul trans-Atlantic flights. This means Emirates - a heavily subsidized state-owned airline - will benefit via codeshare agreement from US taxpayer dollars – not a US flag air carrier as required by the Fly America Act.”

Carter said US carriers should never engage foreign codeshare partners to assist in the operation of international contract routes for US government-funded travel.

“JetBlue is not asking Emirates to supplement its own flights ... it is asking Emirates to provide all of the service between JFK and Milan that the contract requires,” he wrote.

However, looking at the contracts that have been awarded by the GSA, American Airlines, Delta and United have been awarded 30 of the 39 city pair routings that include Dubai, despite none of the carriers serving the city. Delta won the most pairs of the three, with 18 contract awards.

JetBlue has landed government travel contracts for 10 city pairs that it serves via its codeshare with Emirates (all US points to Dubai excluding Houston). They are ten contracts out of 11,204 awarded by the GSA.

In response to the claims made by Delta, a spokesperson for JetBlue said: “GSA awards contracts that deliver the best value to the US taxpayer and JetBlue is honoured to have this traffic with our codeshare partner.”

An Emirates spokesperson said: “Our codeshare partnership with JetBlue has grown from strength to strength, and continues to benefit both airlines and our customers.”

The recent escalation comes amid claims from US carriers that Emirates, Etihad Airways and Qatar Airways have “received more than $50 billion in subsidies and other unfair benefits from their government sponsors”, which they say is at odds with US policy and violates Open Skies agreements. All three airlines have continuously denied the claims.

Speaking to media in the UAE this week, Economy Minister Sultan Saeed Al Mansouri said Government representatives met with US officials in Washington DC to discuss accusations from three US airlines that the Gulf carriers had been competing unfairly.

“We are working together amicably,” Al Mansouri said. “We had a positive meeting with the American side with a vision to resolve the issues as we move on.

“What will determine the whole thing is the open skies policy agreement that we have with them. The UAE did not violate that agreement and this is what we came up together as an agreement between the two sides.”

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