Skift Take

A lot is at stake here and we expect the investigations to continue.

The U.S. airline and labor union coalition calling for changes to Open Skies agreements released a large cache of financial reports from Qatar Airways and Etihad Airways which were the foundation of their case against Gulf carriers’ governmental subsidies.

“With the U.S. government now investigating the Gulf carriers’ massive subsidies, Qatar Airways, Etihad Airways and Emirates must open their books and offer the same level of financial transparency that U.S. airlines provide,” said Jill Zuckman, spokesperson for the Partnership for Open & Fair Skies.

American Airlines, Delta Air Lines and United Airlines indicated they undertook this extensive search for documents because of what they characterize as a lack of transparency demonstrated by Emirates, Etihad and Qatar Airways.

On the transparency front, though, in their report on the Gulf carriers $42 billion in governmental subsidies that the three U.S. carriers released in March, they did little to illuminate the extent of governmental assistance to their own operations over the years.

As the U.S. airline and union coalition indicates, despite the thoroughness of their research, “the interlocking relationships among the [Gulf] airlines, their suppliers, their hub airports and their government owners, has made it impossible to document the full extent of the subsidies.”

However, the group asserts that the $42 billion in subsidies that U.S. airlines documented “understates the true numbers.”

The report didn’t include “subsidies received prior to 2004, massive purchases of goods and services from affiliated government-owned entities at not-at-arm’s-length prices, subsidized airport infrastructure and services, exemptions from corporate taxes and other taxes and duties, exemptions from competition laws, and more.”

As Zuckman states: “The information in the financial records already in the possession of the U.S. government provide indisputable proof that Qatar and the UAE are funneling massive amounts of money into their state-owned airlines in a calculated effort to undermine Open Skies policy and any semblance of fair competition. We believe that the $42 billion in subsidies and other unfair state benefits that our investigation uncovered is just the tip of the iceberg.”

The financial documents released today by the Partnership for Open & Fair Skies form the basis for a white paper produced by the partnership Restoring Open Skies: The Need to Address Subsidized Competition from State-Owned Airlines in Qatar and the UAE.

The Gulf carriers largely reject the arguments of Delta, American and United. For example, Emirates CEO Tim Clark a couple of weeks ago described reports submitted by the big three U.S. carriers as part of their argument against U.S.-UAE Open Skies agreements as “wholly spurious, fallacious, [and] malicious.”

A spokesperson for Etihad Airways provided the following comment to these newly released financial documents:

“Etihad is reviewing the data and will respond in due course. While the Big 3 U.S. airlines carry on their distraction campaign to obscure their own competitive missteps, Etihad will continue to operate in full compliance with the U.A.E.-U.S. Open Skies agreement. We are proud of our success, connecting millions of travelers to and from the US with world class service to new and emerging destinations unserved by U.S. airlines.”

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Tags: american airlines, delta air lines, open skies, qatar airways, united airlines

Photo credit: The Open Skies debate is becoming a battle of financial documents and bluster. Skift

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