Parker: Time for government to address Gulf subsidy issue

A dispute between the largest U.S. airlines and Persian Gulf carriers over alleged subsidies has reached an impasse and should be taken up at the government level, the head of Fort Worth-based American Airlines Group said Tuesday.

American, Delta Air Lines and United Continental Holdings contend that Emirates, Etihad Airways and Qatar Airways receive government subsidies that allow them to compete unfairly. Talks with their counterparts at Gulf airlines haven’t resolved the issue, American CEO Doug Parker told reporters in Hong Kong, where he was celebrating the first anniversary of nonstop service from Dallas/Fort Worth Airport.

“We’ve agreed to disagree, and I think this now belongs with governments, not CEOs,” Parker said at a media briefing. “We can compete with airlines. We can’t compete with countries.”

U.S. airlines say the Gulf carriers have received $42 billion in subsidies from Qatar and the United Arab Emirates, allowing them to win market share by offering cheap international connections through their hubs. They have asked the U.S. government to keep the Gulf carriers from adding more U.S. flights pending a review of Open Skies air treaties among the countries.

“We’re petitioning the government to enforce our trade laws,” Parker said.

The Gulf carriers deny they receive subsidies and say the U.S. airlines are trying to bully them because they can’t compete on quality. U.S. carriers received their own subsidies after the Sept. 11, 2001, terrorist attacks and shed debt with government blessing via Chapter 11 bankruptcy reorganizations, Qatar Airways CEO Akbar Al Baker said in May.

Parker disagreed.

“You just need to ask the creditors of U.S. airlines that filed bankruptcies or the employees who took pay cuts as to whether or not the governments subsidized those airlines, or whether they did,” Parker said. “If that’s the real argument they have, that ‘You’re subsidized also,’ we disagree. But let’s have that conversation.”

Qatar Airways could pull out of the Oneworld alliance, which includes American Airlines, if the dispute drags on, Al Baker said last week. Parker said he hoped that wouldn’t happen.

American Airlines “is really happy with Oneworld and the partnerships that are there, and hopes those relationships continue to exist,” he said. “That’s a marketing relationship that we view as separate from public policy.”

As part of their rapid U.S. expansion, Emirates, Etihad and Qatar have all added service to American’s home base at DFW Airport, including Emirates flights to Dubai using the double-decker A380. The flights have helped the airport greatly increase its international traffic.

American has been expanding globally as well, including new service from DFW to Beijing and Shanghai. American will soon begin service from Los Angeles to Sydney, Parker said, and plans to take over Delta’s former landing slot at Tokyo’s Haneda Airport for flights from Los Angeles.

This article includes material from Star-Telegram archives.

This story was originally published June 23, 2015 at 11:50 AM with the headline "Parker: Time for government to address Gulf subsidy issue."