The EU Is Coming to the Support of U.S. Airlines Angry About Gulf Carriers

The Partnership for Fair and Open Skies in the U.S., a coalition of the largest three U.S. airlines and four labor unions representing pilots, flight attendants, and maintenance workers has applauded the decision by Transport Commissioner Violeta Bulc to push for new talks with Persian Gulf states over subsidies to their airlines during the Transport, Telecommunications and Energy Council meeting in Brussels on March 13.

Acting on requests from secretaries of transport from France and Germany, Bulc referenced the report prepared by U.S. airlines which points to beneficial interest-free loans, free land, and low airport charges, and other considerations representing $42 billion in “quantifiable subsidies” which, U.S. airlines say, have given Gulf carriers an unfair competitive advantage and allowed for their rapid expansion.

Speaking to the press after the Council meeting in Brussels, Bulc said European aviation is “very much challenged by competitiveness right now and we need to address it in a more comprehensive way.” Bulc described the commission debate as positive overall, and expressed satisfaction that “the commission has already put in [its] work program the aviation strategy.” The commissioner acknowledged that there were strong differences of opinion among members during the debate, but believes everyone will work together to address the issues.

Though previous negotiations with Gulf countries under former Transport Commissioner Siim Kallas failed, the Commission will seek a new mandate from the EU governments to curb state aide to airlines from Persian Gulf states as well as from other countries like China, Brazil and Turkey, according to Bulc.

In a joint statement after the TTE Council meeting, French and German secretaries of state for transport Alain Vials and Alexander Dobrindt complained over the growth of Gulf carriers in Europe.

“European airlines are losing market share against the Gulf companies, because of their unfair competitive practices, and in particular because of the significant public subsidies and guarantees they enjoy,” they said.

France and Germany have each imposed a freeze on additional flights by the Gulf carriers into their countries until a resolution is reached on the issue of subsidies.

While applauding developments in Europe, Jill Zuckman, spokesperson for the Partnership for Open & Fair Skies suggested that the US should impose similar limits to the growth of Gulf carriers.

“European countries understand all too well that the subsidies the Gulf carriers receive are distorting the marketplace and costing jobs. We believe the United States government should follow suit and similarly ask to freeze additional flights,” she said.

U.S. Airlines have asked the Obama administration to set limits on Gulf carrier services to the U.S. until these Open Skies issues are addressed.