Qatar CEO on Delta CEO: “I Will Hang Him on a Wall”
Joe Cortez December 09, 2015
Middle East carrier executives double-down on increasing service to the United States, while legacy carriers continue to reduce service to Gulf destinations
The chief executives of both Etihad Airways and Qatar Airways are taking aim at America’s legacy carriers by effectively dismissing the Open Skies investigation while continuing to expand services at airports in the United States. Meanwhile, America’s legacy carriers are responding by continuing to reduce service to the Middle East, as United announced they will be the next to cut air routes.
The exchanged blows reflect the latest tussle in the Open Skies controversy engulfing America’s three legacy carriers (American Airlines, Delta Air Lines and United Airlines) and the Middle East Three (Emirates, Etihad and Qatar Airways). Opened nearly a year ago, the American carriers allege the ME3 were allowed rapid expansion through the acceptance of $42 billion in subsidies from their respective governments.
Today, Etihad chief executive James Hogan claims he has other concerns to worry about.
“I run a global airline based in Abu Dhabi and we operate in six continents in the world. We have challenges in every continent. Quite frankly, we’ve tackled this,” Hogan said in an interview with Skift when asked about Open Skies. “We’ve addressed it properly and thoroughly and I’m more focused on the day-to-day issues at a point in time.”
Hogan claims his airline has only improved the U.S. aviation industry, citing Etihad’s continued working agreements with American and JetBlue. According to the executive, Etihad only provides less than one percent of all available seats departing the United States but provides a bigger footprint of connectivity around the world.
The comments mirrored those of outspoken Qatar Airways chief executive Akbar al-Baker. While announcing the first Airbus A350 service to the United States at a press conference on Wednesday, December 9, al-Baker had one word to describe the allegations made against his airline and his colleagues: “baloney.”
“What [the legacy carriers] are trying to do is to stifle competition to deprive the American public,” al-Baker told the gathered press at the event, according to Mashable. “Of all airlines in the world, 49 percent [of profit] is made by the three American carriers…what more do they want?”
The executive used his podium time to illustrate the differences between the passenger experience aboard his airline and that aboard the American carriers, claiming Qatar Airways strived to create an experience for passengers. When asked about his continued rivalry with Delta chief executive Richard Anderson, who once called the ME3 the greatest challenge to the aviation industry, al-Baker made his feelings very clear.
“Let him come face to face with me in any forum,” the executive told the group. “I will hang him on a wall.”
The statements from the two Gulf carriers were met by one from legacy carrier United Airlines. After losing a government contract to JetBlue, the carrier announced they would no longer service Dubai International Airport (DXB) from their hub at Washington Dulles International Airport (IAD). In a press release, United blamed the U.S. government for the reduction in service, after the General Services Administration (GSA) awarded a transportation contract between IAD and DXB to JetBlue. The airline noted that JetBlue does not operate flights between the two countries, leaving the work to codeshare partner Emirates.
“It is unfortunate that the GSA awarded this route to an airline that has no service to the Middle East and will rely entirely on a subsidized foreign carrier to transport U.S. government employees, military personnel and contractors,” Steve Morrissey, vice president of regulatory and policy at United, said in the statement. “We believe this decision violates the intent of the Fly America Act, which expressly limits the U.S. government from procuring commercial airline services directly from a non-U.S. carrier.”
The concerns were echoed by the Partnership of Open and Fair Skies, a consortium representing the legacy carriers and other interested parties in the United States. The group called upon the Obama administration to settle the current Open Skies argument and level the growth of the ME3 in the United States.
“United’s decision is further proof that the billions of dollars in Gulf carrier subsidies have distorted the playing field and made true competition impossible for U.S. carriers,” Jill Zuckman, spokesperson for The Partnership, said in a statement. “When this happens, the men and women of the U.S. aviation industry are the ones who are hurt.”
The reduction in service is the second by an American legacy carrier. Earlier this year, Delta announced they would also stop service to the Middle East, ending daily service from Atlanta to Dubai.
[Photo: AP]
I recently read an article talking about how UA/AA/DL pay almost no taxes to the US government. For some reason they are able to write off losses from many years back on their current taxes. UA was writing off losses for the 2014 tax year they incurred back in 2008. I own a corporation and I am only allowed to write off losses as far as 2 tax years back. So now UA is mad at the Federal Govt for awarding a contract to JetBlue. According to the same article JetBlue actually pays taxes to the US Government. I would rather see a company that manages their business properly and pays taxes get a Govt contract than one who consistently mismanages their business, pays no taxes and offers customers poor service. UA/AA/DL, its a changing world and your days are numbered.
PS- I am neither affiliate with nor employed by any airline. i just fly a LOT.
You know something, people, if we subsidized US airlines like other countries do, you would get much nicer planes and better service and food. But since deregulation occurred, all people want is CHEAP CHEAP CHEAP prices. And that's what you get. What do you think Etihad is charging for its flights? I just pulled this up- NY to Abu Dhabi is $1695 on Etihad and $1716 on American. Etihad is a government OWNED and subsidized airline but it is still charging the same prices as the US airlines. THAT'S the reality- they are making $$$- not the US airlines. None of these Arab airlines are doing you any favors. From the WSJ 6-1-2015: Etihad received $14.3 billion in capitalization from its government owner since it began flying in 2003. Or from the Partnership for Fair Open Skies: "Since 2004, the governments of Qatar and the UAE have provided $42 billion in subsidies and other unfair benefits to Qatar Airways, Etihad Airways and Emirates This subsidized support includes interest-free government “loans” with no repayment obligation, government grants and capital injections, free land, airport fee exemptions and more." No US carrier gets anything like this from the US government. And don't kid yourselves for one second that the US government gave away an international route to JetBlue because the service wasn't good on legacy carriers. That was a complete political move. If you believe that our government was not trying to gift these Arab airlines, then I have a bridge in Brooklyn to sell you-- real cheap too.
The US airlines have a cheek. Every ten years they go Chapter 11 and take billions off the US taxpayer. Then, in the 'good years' all their excess profits go to their shareholders, while US passengers pay the highest fares in the world. Shame on them. They scream the merits of competition - then do all they can to stifle it. Try setting up a domestic airline in the US - you haven't a hope. It's all stitched up.
Tough crowd here... Love it!! Stick it to AA/DL/UA!! I echo the sentiment already said... Service so bad that even the US gov't is avoiding when going abroad. These legacy airlines need to improve their service onboard for everyone not just the premium cabin. Bring back the glam of flying... I'm a fan of the bundled pricing package too...