Changes To Gulf Open Skies Pacts Could Involve Price, Capacity Dumping Rules -Delta CEO

Potential changes to U.S. Open Skies pacts with Qatar and the United Arab Emirates could involve new rules on price-lowering and capacity-dumping, Delta Air Lines Inc Chief Executive Officer Richard Anderson said on Wednesday.

The remarks during a conference call on the company’s earnings represented one of the clearest statements yet by U.S. airlines on what they hope talks between the U.S. and the Gulf states would achieve if they take place.

Delta and other U.S. airlines have charged their Gulf competitors with receiving more than $40 billion in subsidies from their home governments. This, they say, has allowed them to lower prices and begin pushing U.S. airlines out of key markets.

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

“We’re in the process of answering questions (from the U.S. government),” Anderson said, “and the end result needs to be like the Chinese steel case or agricultural cases that the U.S. frequently brings (to the World Trade Organization), where you come up with remedies that will address a subsidy.”

The Obama administration on Friday solicited comments on the debate and said it expected to begin reviewing submissions by the end of May.

The government has not indicated whether it would discuss the subsidy claims with Qatar and the UAE.