US And Gulf Airlines Set To Clash At Aviation Summit Over Subsidy Row

Three U.S. airlines have accused their GCC competitors of receiving more than $40 billion in government subsidies, a charge which the latter deny.



Top executives of U.S. and Gulf airlines will take their dispute over whether “open skies” deals have led to unfair competition to a high-profile public forum in Washington on Tuesday as each side ramps up efforts to sway U.S. regulators.

Three U.S. airlines have accused their competitors from the Gulf of receiving more than $40 billion in government subsidies, and have called on the White House to address the claims in talks on “Open Skies” with Qatar and the United Arab Emirates.

Emirates Airline, Qatar Airways and Etihad Airways have denied the allegations, saying U.S. airlines have lost market share because of their inferior service.

The Obama administration has said in statements that it takes the competition concerns of the U.S. airlines seriously, but remains “committed to the Open Skies policy which has greatly benefitted the traveling public, the U.S. aviation industry…and the broader U.S. economy.”

Airline industry executives are expected to address the dispute on Tuesady at a conference sponsored by the U.S. Chamber of Commerce. Etihad’s Chief Executive Officer James Hogan will kick off the debate with a speech at 9:50 a.m. EDT (1350 GMT), following a speech by Carsten Spohr, chief executive officer of Lufthansa Group.

In the meantime, the U.S. and Gulf airlines have assembled teams of high-profile Washington insiders to help argue their case.

Working for the Partnership for Open & Fair Skies, a coalition of Delta Air Lines Inc, United Continental Holdings Inc, American Airlines Group Inc and their labor unions, are legal counsel from WilmerHale with extensive experience in trade negotiation and a former director of public affairs at the U.S. Department of Transportation.

Lobbying for Emirates is John Byerly, a former deputy assistant secretary for transportation affairs in the U.S. Department of State, according to a publicly filed disclosure.

As the sides jostle for U.S. regulators’ favor, a development in Europe may have added to the pressure that the Gulf carriers face as well.

The European Commission said last week that it will address French and German concerns over the alleged subsidies when it proposes a commercial aviation agreement with the Gulf region later this year.

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