Boeing, FedEx battle back vs U.S. airlines on Gulf competition

Thu Feb 26, 2015 2:32am EST
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By Jeffrey Dastin and Tim Hepher

(Reuters) - A push by three U.S. airlines to curb competition from Gulf state carriers has triggered a sharp response from other powerful U.S. aviation companies including Boeing Co (BA.N: Quote) and FedEx Corp (FDX.N: Quote), potentially complicating the airlines’ campaign for Obama administration support.

Delta Air Lines Inc (DAL.N: Quote), United and American Airlines have asked the White House to look into the financial statements of competitors from Qatar and the United Arab Emirates, which they accuse of receiving more than $40 billion in government subsidies since 2004.

But calls for the United States to tamper with Open Skies agreements with the Gulf nations have angered other U.S. companies that benefit from the pacts. The agreements eliminate barriers that would block some FedEx operations and slow the expansion of carriers like Emirates that have showered Boeing with orders.

A counteroffensive from Boeing, Fedex and others could make it easier for the White House to resist renegotiating the agreements.

“I think the entry into the fray of Boeing and the others as countervailing pressures to the airlines will make it easier politically for the administration to do what I believe the Department of Transportation wants to do, namely, to continue to pursue its successful Open Skies strategy," said New York University law professor Michael E. Levine.  

Boeing, which like European rival Airbus (AIR.PA: Quote) has filled its order book with commitments from Gulf carriers, opposes drastic changes to the Qatar and U.A.E. agreements.

"Boeing supports a commercial-aviation industry based on open and fair competition, and Open Skies has long been a key factor in this, benefiting both U.S. and international airlines," Boeing spokesman Jim Proulx said in a statement.

Other companies were more blunt in taking on the top U.S. airlines, long big Boeing customers.   Continued...

FedEx planes are parked during a nightly "sort" at the company's Memphis hub during the company's busiest overall volume night of the year in Memphis, Tennessee early December 15, 2009. REUTERS/Lance Murphey