Global airlines buoyed by a record profit forecast are also grappling with how to mend a rift between the largest U.S. carriers and their rivals in the Persian Gulf.
The annual general meeting of the International Air Transport Association began Monday in Miami with a prediction that 2015 earnings will soar almost 80 percent to $29.3 billion. But within hours, Qatar Airways accused the U.S. airlines of mounting a protectionist threat, and IATA’s chief acknowledged the pressures unleashed by the dispute.
“It’s no secret,” Director General Tony Tyler said. “There is underlying tension in our industry.”
Fort Worth-based American Airlines Group, Delta Air Lines and United Continental Holdings want the U.S. to reopen aviation-treaty talks with United Arab Emirates and Qatar on grounds that Emirates, Etihad Airways and Qatar Airways have received more than $40 billion in government subsidies, giving them an unfair advantage as they expand in the United States.
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“Any rollback of liberal market access and Open Skies policies will reverberate across the whole world and lead to retaliation,” Qatar Airways Chief Executive Officer Akbar Al Baker said during the conference’s opening session. The Gulf trio has denied receiving improper government subsidies.
American CEO Doug Parker, whose airline is a partner with Qatar Airways in the Oneworld alliance, said he met with Al Baker in Miami and “we have a disagreement on this point.”
“It has nothing to do with protectionism,” Parker said. “It is about being able to compete against airlines, not governments.”
While the issue is absent from the official agenda for the IATA event, some CEOs said the tussle inevitably will intrude on the gathering. The feud is a sobering counterpoint to the optimism on display as carriers benefiting from lower fuel prices savor the prospect of surging profits.
“It’s a huge elephant, and it’s going to be in every room,” Willie Walsh, CEO of British Airways parent IAG SA, said before the event. “We’re all going to want to talk about it.”
IATA is trying to steer around a dispute that is properly resolved by governments, not the industry, Tyler told reporters Monday at a news conference.
“It’s obviously important for us to be, as far as possible, united and agreed,” Tyler said. “This is one on which our members have different opinions.”
No one predicts a quick resolution of the dispute. Among the people attending the meeting will be U.S. Transportation Secretary Anthony Foxx, added to the list of speakers late last week. The Transportation Department is among the federal agencies reviewing the U.S. airlines’ Gulf complaints.
“It would be healthy for the industry to discuss it,” IAG’s Walsh said. “I don’t think that’s going to happen because I think people will want to avoid it and be diplomatic.”