The chief executive of Qatar Airways Ltd. — and chief antagonist of Delta Air Lines Inc. — has said that his new Atlanta-Doha route would “rub salt in the wounds” of his U.S. rival. Jennifer Lopez will be on hand to shake out the first dash.
On Tuesday night the Persian Gulf airline will celebrate flights linking Qatar’s capital to Delta’s headquarters city, with J. Lo, as the star is known, expected to perform at the city’s historic Fox Theatre in front of Qatar CEO Akbar Al Baker and guests.
The backdrop to the gala is a dogfight in international skies between established U.S. carriers like Delta and upstart Middle Eastern airlines. Delta has accused Qatar and other Gulf carriers of competing unfairly by receiving billions in government subsidies to seize huge shares of the global market. Qatar’s new route to Delta’s hometown is the latest salvo in the battle.
“The bottom line is the blank government checks that Qatar and the other Gulf carriers receive are wreaking havoc on the U.S. aviation industry and threatening hundreds of thousands of American jobs,” said Jill Zuckman of the Partnership for Open and Fair Skies, an advocacy group backed by Delta, other U.S. airlines and labor unions.
Qatar and fellow Gulf carriers Emirates and Etihad Airways PJSC are supported by loan guarantees, interest-free loans, capital injections and assumptions of fuel-hedge losses from their respective governments, according to U.S. airlines. The total tab: $42 billion in subsidies and other benefits, the U.S. carriers have said.
The Middle Eastern airlines have denied getting such subsidies and said their U.S. rivals benefited from government handouts through bankruptcy protection.
Qatar’s daily Atlanta-to-Doha flight makes its debut June 1 with the world’s biggest passenger jet, Airbus Group SE’s superjumbo A380. Qatar typically equips its A380s with 517 seats, according to aviation information website Seatguru.com. After the initial flight, the route will use Boeing Co. 777-200LRs, on which Qatar usually has 259 seats. Qatar also is expanding in Europe, saying Tuesday that it had increased its stake in British Airways owner IAG SA.
Hiring an A-lister to headline a swanky launch party isn’t unusual for Qatar; it enlisted Mariah Carey for a January fete in Los Angeles. And Virgin America lined up Canadian rapper Drake for the debut or its Toronto flights. Lopez, a music and movie superstar with the lead role in NBC’s “Shade of Blue” detective drama, gave a private performance Monday for NBCUniversal Telemundo Enterprises, a Spanish-language media company.
Star power notwithstanding, Delta has predicted that Qatar’s route will fail. Only five people a day start in the Atlanta area and end their journey in Doha or vice versa, Delta President Glen Hauenstein said on an April 14 conference call. While acknowledging that many passengers connect to other destinations, that base figure of “origin and destination” passengers is low, he said.
“We don’t have any markets that we fly halfway across the world that have less than 10 people a day,” Hauenstein said. “And I don’t think you’ll find any carriers in the world that do.” Delta ended a similar Atlanta-Dubai route in February, saying it was unprofitable.
Qatar’s data suggest that at least 16 passengers a day will fly just between the two cities and many more will catch connecting flights, according to a spokesman. The airline will be the first Gulf carrier to serve Atlanta directly, giving people traveling to elsewhere in the Middle East or the Indian subcontinent a more direct route, he said.
The new Atlanta flight is part of a broader threat to Delta, American Airlines Group Inc. and United Continental Holdings Inc. from the Gulf carriers. In 1998, Emirates ranked 30th among world airlines in international seating capacity, while Qatar was No. 90 and Etihad didn’t make the cut. By 2014, they ranked Nos. 1, 10 and 13, respectively, according to a report issued last year by the three big U.S. airlines.
Qatar isn’t the only overseas carrier inaugurating service from Atlanta. Turkish Airlines held a formal gala in Atlanta on Monday night to celebrate its new route from the city to Istanbul.
©2016 Bloomberg L.P.
This article was written by Michael Sasso from Bloomberg and was legally licensed through the NewsCred publisher network.