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The
largest U.S. 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 Inc, 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 U.S. companies and jobs.
The contract also struck a nerve because Delta and peers are
embroiled in competition and an ongoing row with Emirates. U.S.
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 subsidized.
The Fly America Act permits exceptions for codesharing
agreements with foreign airlines, however. Carriers such as
Delta and American Airlines Group Inc 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, based in the United Arab Emirates. American previously
held the New York-Milan contract.
American said on Tuesday that U.S. carriers themselves operate
flights between New York and Milan, distinguishing that route
from those they do not serve where U.S. 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 Inc to cancel the
route. Emirates operated the flights; a review by the U.S.
Government Accountability Office found no objection.
The U.S. General Services Administration said all its contracts
complied with the Fly America Act.
(Reporting by Jeffrey Dastin in Washington; Editing by Stephen
Coates)
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