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Thu 1 Oct 2015 10:51 AM

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Foreign airlines grab US passenger market share, amidst ongoing subsidies row

New official figures also show the MidEast carriers have increased their share of the US international air travel market more than 3 times that of others

Foreign airlines grab US passenger market share, amidst ongoing subsidies row
(Getty Images)

Foreign carriers are closing in on US airlines’ share of the country’s international air traffic, increasing their passenger numbers by more than four times the local carriers, new official figures show.

The results could add fuel to the argument presented by the three biggest US airlines in their battle to reduce Gulf carriers’ access to the market, on claims they receive more than $40 billion in government subsidies that are anti-competitive.

The Middle East’s market share growth during August was a significant 18.8 percent, more than three times that of any other region.

However, it still only accounts for 4 percent or 6.324 million passengers.

Gulf carriers and airports also still rank low in the list of international carriers or airports serving the US.

International air traffic to and from the US rose 5 percent in August, compared to the same month last year, according to the Ministry of Transport.

A total of 142.3 million passengers were recorded for the month, including 65.3 million citizens, up 7 percent, and 77 million non-citizens, up 4 percent.

US airlines increased their passenger numbers to 72.3 million, up 2 percent, but their share of the market slipped to 51 percent, as foreign carriers took 70 million passengers, up 9 percent from the same period in 2014.

Two of the big three US carriers currently battling Gulf carriers also lost market share, which will likely encourage them to continue their push for the government to reassess its open skies agreements with the UAE and Qatar.

The Gulf airlines have consistently denied the anti-competitive allegations and argue their services do not directly compete with those of the US carriers. They have challenged the American airlines to improve their services to retain passengers.

United Airlines’ international passenger numbers declined 0.2 percent in August and American Airlines dropped 0.5 percent, while Delta Air Lines rose a healthy 4.4 percent.

However, all three big players last month reported profit increases for the second quarter.

Total US airline earnings jumped 54 percent, thanks mostly to lower jet fuel costs and higher revenue from baggage and ticket-change fees.

Passenger airlines reported net income of $5.5bn in the second quarter, the US Department of Transportation said.

The figures showed airlines, particularly the big three, had partly offset lower fares with higher fees. Money from baggage fees rose 7 percent to $962m, and revenue from ticket-change fees grew 2.7 percent to $773m, according to the Transportation Department.

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