The Feud Between US Carriers and Qatar Airways Is Heating up Again
The three US legacy airlines have beef with Qatar Airways… again.
American Airlines, Delta Air Lines and United Airlines just recently put a simmering feud with the Gulf carrier to rest in January 2018. The three US airlines had long accused Qatar of unfairly receiving government subsidies to compete in the US market. That dispute ended after Qatar agreed to open its accounting books and agreed it wasn’t planning any flight routes from the US to destinations outside Qatar, which would be known as a “fifth freedom” flights.
Now the three American carriers are accusing Qatar of planning fifth freedom routes using Air Italy, a tiny European airline in which Qatar owns a 49% stake. Air Italy plans to launch flights from Los Angeles (LAX) and San Francisco (SFO) to Milan (MXP) in April 2019. Delta, American and United claim that this violates Qatar’s pledge against fifth freedom flights made last January.
Following the Dec. 5 announcement of Air Italy’s routes from California to Milan, the Partnership for Open & Fair Skies, a coalition that includes American, Delta and United, called Qatar’s investment in Air Italy a way for the Doha-based airline to create a “loophole and dodge this pledge.”
“With the announcement of new routes from Air Italy to the US, fueled by money from Qatar Airways, the government of Qatar has demonstrated a stunning lack of respect for President Trump and Secretary of State Pompeo,” the statement continued.
Likewise, United CEO Oscar Munoz said in a conference call last week that the new Air Italy routes were “an in-your-face to our administration on agreements that have been reached.”
“With regards to the Italian version of Qatar, we are strongly opposed, and we together — Delta, American and United — are very closely aligned on this issue,” Munoz said on the call.
Requests for comment to Qatar Airways from TPG were not returned by time of publication, a representative for Air Italy stressed that Qatar Airways only owns 49% of the Italian carrier.
“As has been stated previously, Air Italy is an Italy-based and Italy-registered independent airline owned by AQA Holding with two shareholders, Alisarda which owns 51% and Qatar Airways which owns 49%, with investment reflecting the shareholders’ respective ownership levels,” Air Italy told TPG in an emailed statement.
Even though Qatar does own a minority stake in Air Italy, US politicians are urging US President Donald Trump’s administration to intervene in the spat. Two weeks ago, 11 Republican US Senators sent a letter to Transportation Secretary Elaine Chao, Secretary of State Mike Pompeo and Secretary of Commerce Wilbur Ross that seemed to echo the US airlines’ concerns.
“Air Italy’s entry into this crowded market appears consistent with Qatar Airways pattern of adding subsidized capacity in markets where demand is already well-served,” the letter said, concluding that the senators would “respectfully appreciate further examination and a response regarding how these recent developments comport with the Qatari Government’s January 2018 commitments to the United States.”
It’s not yet clear if the Trump administration will look into the accusations.
Welcome to The Points Guy!
WELCOME OFFER: 80,000 Points
TPG'S BONUS VALUATION*: $1,600