U.S. and Gulf airlines clash at aviation summit

Tue Mar 17, 2015 12:51pm EDT
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By Jeffrey Dastin

WASHINGTON (Reuters) - Top executives of U.S. airlines and their Middle East competitors clashed in Washington on Tuesday over whether "open skies" deals are fair, and each side ramped up efforts to sway U.S. regulators at a high-profile forum.

U.S. carriers charge the Gulf airlines are benefiting unfairly from government subsidies. A coalition of Delta Air Lines Inc (DAL.N: Quote), United Continental Holdings Inc (UAL.N: Quote), American Airlines Group Inc (AAL.O: Quote) and their labor unions accused Gulf rivals of receiving more than $40 billion in government subsidies.

U.S. carriers say the Gulf airlines benefit unfairly from more than $40 billion in government subsidies that have allowed them to drive down prices and begin pushing U.S. airlines out of key markets. Executives are expected to air their concerns at a conference sponsored by the U.S. Chamber of Commerce Foundation.

Emirates Airline [EMIRA.UL], Qatar Airways and Etihad Airways have denied receiving improper subsidies, saying U.S. airlines have lost market share in part because of inferior service.

Delta, United, and American have called on the Obama administration to address whether to renegotiate open skies agreements with Qatar and the United Arab Emirates

The Obama administration has said it takes competition concerns of the U.S. airlines seriously, but remains "committed to the open skies policy" which it says has helped travelers, the U.S. aviation industry and the U.S. economy.

On Tuesday, U.S. House Committee on Transportation and Infrastructure Chairman Bill Shuster told reporters the panel has asked the administration to look into the subsidy allegations, which he said appear valid.

    “They’re state-owned companies, and they’re getting what we believe are infusions of cash, which is not fair,” Shuster said.   Continued...