Doha
Qatar Airways has submitted a 'white paper’ to the US government, refuting the subsidy allegations levelled against it by the Big 3 US carriers - American, Delta and United.
The submission addresses and answers all issues raised in the Open Skies debate, which has put into question the longstanding US policy of allowing carriers to fly to and from the US with minimal government interference, the Doha-based airline said in a press statement.
It noted that the Big 3 and their unions have been pressing the US government to depart from its pro-Open Skies stance and impose unilateral limits on the services operated by Gulf airlines, even though the policy was specifically designed by the US government to ensure that US carriers were free to operate their extensive networks without foreign government restrictions on the level and "routings" of the services they offer.
“The US government should reject calls to ‘freeze’ the US-Qatar Open Skies Agreement and recognise these allegations for what they are – a transparent attempt by the Big 3 to block air services that compete with their own,” Qatar Airways Group CEO Akbar al-Baker observed.
The biggest US carriers have made ample use of their behind-country (Sixth Freedom) traffic rights and fought hard to preserve their own access to those rights, and to carry Fifth Freedom (third country) traffic as well, Qatar Airways asserted. Given that these policies were created by and for US carriers, it is ironic that they are now describing the use of these traffic rights to be ‘unfair’ when exercised by Gulf carriers, it further noted.
“It is puzzling to see the biggest US carriers describe Qatar Airways as a 'threat', given our small size and lack of direct competition with them. Their longstanding focus on other markets and large (and growing) profits completely undercut this claim," al-Baker stressed. "The Open Skies model was developed by the American carriers and has demonstrated how an Open Skies paves the way for an open economy.
"We are concerned to see the Big 3 seek to change the rules of the game as soon as they see US consumers respond well to the services offered by a competitor. Qatar Airways is proud of its signature five-star service, brand identity and the high standards we deliver to our passengers on board.”
'Unfair competition'
In its report, Qatar Airways demonstrated that many of the market changes complained of by the Big 3 were not the product of “unfair competition” - or anything related to subsidy - but were instead the byproduct of important advances in aircraft technology and significant demographic changes.
Qatar Airways also demonstrated that its services were lawful and consistent with the US-Qatar Agreement, which in Article 11.2 says that “neither party shall unilaterally limit the volume of traffic, frequency or regularity of service, or the aircraft type or types operated by the designated airlines of the other party.” Despite this "clear language", the Big 3 are urging the US government to ignore its obligations by imposing a unilateral limit on Qatar Airways’ capacity, it observed.
Other US airlines have noted that foreign governments often try to block competition from strong US airlines by challenging “excess” capacity offered by US carriers, and cautioned the US government against deviating from a free trade policy that has worked to the "overwhelming benefit" of US airlines.
Qatar Airways said it also examined and rebutted each of the subsidy allegations made, noting that US carriers benefit from many of the same policies they have attacked.
“The claims of subsidy advanced by the Big 3 include items of support that US carriers have themselves received for decades, and items that have never been viewed as a form of subsidy. In fact, many other airlines (including US airlines) have acknowledged publicly that they and the Big 3 have themselves been long-time beneficiaries of subsidies and favourable US policies and support,” the airline said.
Further, the report shows that the airline’s operations to the US market have “significantly contributed to the economy in terms of jobs, cargo and overall passenger traffic (tourism and business travel growth), as well as providing benefits for non-aligned US passenger carriers, cargo carriers and airports”.
In addition to benefiting American travellers, Qatar Airways said it has “strongly supported” the US aerospace industry. As of today, the airline has 162 aircraft flying to 150 destinations, of which over 40% are Boeing jets worth over $19bn.
