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 Delta Air Lines Inc, United and American Airlines have asked the
White House to look into the financial statements of competitors
from Qatar and the United Arab Emirates, which they accuse of
receiving more than $40 billion in government subsidies since 2004.
But calls for the United States to tamper with Open Skies agreements
with the Gulf nations have angered other U.S. companies that benefit
from the pacts. The agreements eliminate barriers that would block
some FedEx operations and slow the expansion of carriers like
Emirates that have showered Boeing with orders.
A counteroffensive from Boeing, Fedex and others could make it
easier for the White House to resist renegotiating the agreements.
“I think the entry into the fray of Boeing and the others as
countervailing pressures to the airlines will make it easier
politically for the administration to do what I believe the
Department of Transportation wants to do, namely, to continue to
pursue its successful Open Skies strategy," said New York University
law professor Michael E. Levine.
Boeing, which like European rival Airbus <AIR.PA> has filled its
order book with commitments from Gulf carriers, opposes drastic
changes to the Qatar and U.A.E. agreements.
"Boeing supports a commercial-aviation industry based on open and
fair competition, and Open Skies has long been a key factor in this,
benefiting both U.S. and international airlines," Boeing spokesman
Jim Proulx said in a statement.
Other companies were more blunt in taking on the top U.S. airlines,
long big Boeing customers.
"The U.S. should not capitulate to the interests of a few carriers
who stand ready to put their narrow, protectionist interests ahead
of the economic benefits that Open Skies provides," David Bronczeck,
chief executive of FedEx's Express air cargo unit said in a Feb. 18
letter to the heads of the U.S. Departments of State, Transportation
and Commerce.
JetBlue Airways Corp, which has a codeshare agreement with Emirates,
also wrote a letter to the same departments opposing tampering with
Open Skies.
Delta, United Continental Holdings Inc and American Airlines Group
Inc <AAL.O> say in the report - which has been reviewed by Reuters
but not yet been made public - that they support Open Skies
agreements but not their abuse through subsidies.
Yet the top U.S. carriers have long been ambivalent toward
liberalizing air travel.
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"The major U.S. carriers have opposed Open Skies and deregulation
all along the way, even from the word go, and yet have been major
beneficiaries due to domestic consolidation and also globally in
terms of market access," said Peter Harbison, chairman of
Sydney-based CAPA-Centre for Aviation, an independent aviation
consultancy.
'SHODDY' SERVICE BLAMED
Emirates, Qatar Airways and Etihad Airways deny the U.S. airlines'
accusations about unfair subsidies. So far, the Obama administration
says it is reviewing the U.S. airlines' claims but has made no
decisions.
In an interview with Reuters Wednesday, Emirates President Tim Clark
hinted at possible legal action over potential commercial harm done
by the U.S. airlines’ campaign. The clash between Delta and the Gulf
airlines has taken a caustic turn, including remarks by Delta's
chief executive that were perceived as linking the Gulf carriers
with the Sept. 11 attacks on the United States in 2001.
Clark also called his U.S. rivals' service "shoddy" and said they
would do better to focus on improving their own product.
U.S. consumer groups such as the Business Travel Coalition agree
that Delta and its U.S. cohorts have only themselves to blame for
the market share loss, a contention disputed by Delta.
Still, the U.S. airlines may have one trump card to play in the form
of Americans for Fair Skies, an organization opposed to Gulf
subsidies that is the project of former Air Line Pilots Association
President and former Delta captain, Lee Moak.
"Protectionism is making a revival as some of the powerful national
airlines exert strong pressure on their governments," Harbison said.
"Have Open Skies reached their limits?"
(Additional reporting by Nick Carey in Chicago and Andrea Shalal and
David Morgan in Washington; Editing by Christian Plumb)
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