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Wed 14 Sep 2016 09:07 AM

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JetBlue Airways calls US airlines 'hypocritical' over Emirates gov't contract row

JetBlue CEO Robin Hayes said three big US airlines use foreign partners to fly US government workers

JetBlue Airways calls US airlines 'hypocritical' over Emirates gov't contract row
Robin Hayes, JetBlues Chief Executive Officer. (Getty Images)

A spat among airlines over which deserved the contract to fly US government workers on certain routes intensified on Tuesday, with the chief executive of JetBlue Airways calling rivals hypocritical for protesting its award.

The largest US airlines have taken issue with a contract for federal employees to buy flights between New York and Milan in 2017 from JetBlue, which are marketed by the New York-based airline but operated exclusively by its codeshare partner, Dubai-based Emirates.

Delta Air Lines, No. 2 by passenger traffic, has said the award undermined the "Fly America Act" that requires taxpayer-funded travel to take place on domestic carriers, for the benefit of US companies and jobs.

The contract also struck a nerve because Delta and peers are embroiled in competition and an ongoing row with Emirates. US airlines have lowered fares to fill planes to Europe - a response in part to Gulf rivals that have added flights at a loss thanks to state subsidies, they allege. Emirates has denied it is subsidised.

The Fly America Act permits exceptions for codesharing agreements with foreign airlines, however. Carriers such as Delta and American Airlines Group take advantage of this, JetBlue CEO Robin Hayes said.

"It’s quite clearly hypocritical nonsense," Hayes said in an interview in Washington. "If the big three airlines can continue to win these contracts using their partners, flying on their partners' metal, why can’t JetBlue?"

For instance, American won the contract for travel from Chicago to Abu Dhabi in 2017, but the flights are operated by Etihad Airways. American previously held the New York-Milan contract.

American said on Tuesday that US carriers themselves operate flights between New York and Milan, distinguishing that route from those they do not serve where US employees have no choice but to fly on foreign partners.

American is "disappointed by the award," added Chief Executive Doug Parker at a conference in Washington.

Last year, JetBlue won the contract for Washington-Dubai flights, prompting United Continental Holdings to cancel the route. Emirates operated the flights; a review by the US Government Accountability Office found no objection.

The US General Services Administration said all its contracts complied with the Fly America Act.

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