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Thu 14 May 2015 12:26 PM

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Global airline growth requires state backing, says Qatar Airways CEO

Akbar Al Baker says it is no different that state-owned carriers in China, Russia, India, Egypt, Saudi Arabia and Ethiopia

Global airline growth requires state backing, says Qatar Airways CEO
Qatar Airways CEO Akbar Al Baker. (Getty Images)

The group chief executive of Qatar Airways has again defended the airline against accusations from US airlines that it received millions of dollars of government subsidies.

However, Akbar Al Baker told the Wall Street Journal that he believes it is impossible for an airline to expand globally without backing from government.

At a press conference in Washington on Wednesday, Al Baker called for continued open skies policies in the US and described the allegations by American, Delta and United airlines as “baseless” and a “transparent attempt to block new competition and limit consumer choice”, according to a report in Gulf Times.

Al Baker was quoted as saying: “US open skies agreements are about offering choice – the ability to fly with the airline you prefer, to regions that are under-served by US carriers.

“The Big Three do not compete with us on a single non-stop route. We serve markets in the Gulf region and Indian subcontinent that US carriers do not serve.

“The beneficial exchange of culture and commerce made possible by the US-Qatar open skies agreement must not be blocked by the Big Three merely because we have chosen to serve markets that they have ignored.”

He added: “The Big Three want to restrict choice. World travellers would suffer if they succeed.”

However, in a subsequent interview with the Wall Street Journal, Al Baker suggested that it was impossible for any airline to achieve an international presence without state support.

“Because it is such a capital intensive industry, [an airline wouldn’t be able to expand] without very strong financial background, especially from the government,” Al Baker was quoted as saying.

He also said the airline’s relationship with Qatar’s rulers was no different from other state-owned airlines, citing carriers in China, Russia, India, Egypt, Saudi Arabia and Ethiopia. “So why when it comes to the Gulf three does it become an issue?”

Gulf airlines Etihad Airways, Emirates Airline and Qatar Airways are embroiled in a dispute with the three biggest US airlines over claims detailed in a white paper last month that they received billions in state subsidies to fund their growth.

The three Gulf airlines have repeatedly defended themselves against the accusations, with Emirates insisting it has never received state subsidies and demanding up to two years to compile a robust response to the white paper.

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MT3 5 years ago

"US open skies agreements are about offering choice ..." I think you'll find that US open skies agreements are whatever the US want them to be about whenever it suits them. I'd suggest the Gulf airlines confer with the European banks on how level a playing field the US market can be.