U.S. Launches Investigation Into Gulf Carriers Over Alleged Subsidies as “Open Skies” Warfare Continues
Joe Cortez April 13, 2015
In light of increasing pressure and a report from legacy carriers, three departments of U.S. government will launch probes into allegations of illegal subsidies distributed to Middle East
Nearly three months after the respective heads of U.S. legacy carriers took their appeals of the Open Skies policies to Washington, three federal government departments have agreed to launch an investigation into whether or not major Arabian carriers accepted $42 billion in illegal subsidies. USA Today reports the Commerce, State and Transportation departments will open an investigation based on the allegations outlined by legacy carriers in a 55-page report.
The joint investigation was officially opened on April 10, over three months after leaders from the U.S. legacy carriers met with the White House to present their case. The joint investigation will seek to find out if the accusations of illegal state subsidies to Emirates, Etihad Airways and Qatar Airways from their respective governments are true. Meanwhile, the Middle East Three airlines continue to dismiss the accusations against them.
“The claims, which are asserted in a publicly available report, are of significant interest to stakeholders and all three Federal agencies,” read a joint statement released by the State Department. “The U.S. government takes seriously the concerns raised in the report and is interested in receiving insights and feedback from stakeholders before any decisions are made regarding what action, if any, should be taken.”
The case is currently open for public comment, with review expected to begin in late May. The Partnership for Open and Fair Skies, an organization made up of the American legacy carriers, trade unions and commercial aviation professional associations, hailed the investigation’s launch.
“We are pleased that the U.S. government is taking the next step to further examine the issue of massive subsidies that Qatar Airways, Etihad Airways and Emirates receive from their governments,” Jill Zuckman, spokesperson for the Partnership, said in a statement. “Their $42 billion of state support, a clear violation of Open Skies policy, has been well-documented. They should open their books if they have nothing to hide.”
At the time of reporting, Etihad was the only member of the Middle East Three to issue a statement about the investigation. “Etihad Airways is committed to setting the record straight regarding these unsubstantiated allegations,” read a portion of the statement. “So far the U.S. airlines have failed to provide the complete details and data supporting these claims to Etihad Airways.”
The investigation is the latest move in the heated Open Skies debate. In March, the EU announced it would review the allegations of illegal subsidies to the Arabian Carriers. Last week, a document released by WikiLeaks alleged U.S. carriers received over $155 billion in subsidies over a period of 70 years.
[Photo: iStock]
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Relangford, no it's not different for other other Middle Eastern or non-ME national carriers including Delta's partner Saudia. The main difference here is that the ME 3 represent a real threat to the US 3's profits.
Also, this is not a 'leak'. You can find this anywhere that archives congressional publications (for example, http://congressionalresearch.com/RL30050/document.php?study=AVIATION+DIRECT+FEDERAL+SPENDING+1918-1998). I guess it seems sexier and more damning if it's presented as a secret document that was slyly stolen from under the government's nose, rather than a straightforward, public document that anyone interested could find in about 20 seconds of Google searching...
Did they buy more A350 than DreamLiners? I wonder what else could have triggered this seizure of defending the competitive markets?
Relangford Leak something in the US and a portion of US society says your a hero but you may still go to jail. Leak something in Russia and you are quietly murdered. With regards the subsidises, the three carriers have some big advantages in being in airports which are huge, with few delays, very cheap labour, no noise restrictions (so 24 hour ops) etc. None of which are state subsidiaries. But Germany seems to think they are subsidies and I was left wondering how Qatar airways can buy 10% of IAG given that IAG is 2 - 3 times as big. Unless they had "help"...
Is this any different from other national airlines (i.e., those owned by the country's government but not in the Middle East)? Also, the WikiLeaks document included airfield and infrastructure costs (like navigation aids, etc.) not directed toward the airlines (and is this different from cities building sport stadiums for highly profitable teams?). Interesting that WikiLeaks only "leaks" items negative toward the U.S. and leaves Russia, China, et al. alone.