The heads of the nation’s three largest airlines offered dire warnings Friday that if the U.S. government doesn’t intervene soon to stop three Persian Gulf airlines from expanding service here then American jobs will be lost.
The CEOs of Delta, American and United appeared together at the National Press Club to stress their campaign against Emirates Airlines, Qatar Airways and Etihad Airways, who they allege are unfair competitiors heavily subsidized by their governments, allowing them to offer cheaper seats to customers. The Gulf carriers deny that they are financially propped up by their governments.
“We need [the White House] to act on it with urgency ...,” said Richard Anderson, CEO of Delta. “Gulf carriers are taking advantage of this time here to add 25 percent more flights ...and that’s a serious issue because the harm is present, it’s happening and now it’s accelerating.”
The group highlighted a new economic study commissioned by their coalition, the Partnership for Open and Fair Skies, that they say shows the Gulf carriers are stealing passengers from the U.S. airlines, while demand for travel to places like India hasn’t increased.
“As a result, the traffic gains enjoyed by the Gulf carriers due to their subsidized expansion to the United States and elsewhere have come at the expense of U.S. and other carriers,” said Darin Lee of Compass Lexecon, which did the report.
The three U.S. airlines — normally competitors but aligned in this fight — are pressing the White House to freeze new routes to the United States by the three Gulf airlines and initiate formal consultation with Qatar and United Arab Emirates under the Open Skies agreement to address the issue.
They were asked about a Washington Post story earlier this week that quoted an administration official casting doubt on whether the Obama administration would step in. The CEOs said they remain confident the U.S. government will take action because the evidence of the alleged wrongdoing by the Gulf carriers is too compelling.
“You cannot compete against an arm of a state, you cannot compete against an infinite supply of oil,” said Jeff Smisek, CEO of United Airlines.
Qatar Airways CEO Akbar al Baker was also in Washington this week to push back against the U.S. airlines’ campaign. And Etihad Airways countered Thursday with its own findings that the U.S. companies also benefit from government financial aid through tax cuts, loan guarantees, debt relief and pensions.
The U.S. airline CEOs called that argument “nonsense.”