The US Carriers Show Their Case Against Middle East Carriers, But Will Anyone Care?

It was just a couple weeks ago that I wrote about how American, Delta, and United have banded together to request that the US reconsider open skies agreements with Qatar and the United Arab Emirates. At the time, what was known publicly didn’t seem like a very strong case to me. When I was at the American Leadership Conference (Disclosure: American provided flights and hotel for the ALC), the airline presented many of us with the details but we were told they weren’t public. Now they finally are, and it’s time to talk about this.

We’ll get into details below, but in short… I do think there is compelling proof of subsidies totaling over $40 billion. The weakest case is, of course, against Emirates which is the only one of the three (Qatar and Etihad being the other two) to have shown any sustainable business case for itself. But so what? Should we care as long as it means cheap flights and easy connections? We should indeed care, but we shouldn’t do anything near what the US carriers are suggesting. That doesn’t mean that doing things “as is” is the right way forward either.

Gulf Carriers Attack

First, head on over and read both the presentation and the white paper that the airlines put together. That white paper is the much-discussed 55-page document that lays out the case.

The airlines, primarily under Delta’s lead, hired forensic accountants to go back and dig up dirt over the last 10 years. Apparently, to fly to some countries you have to file financial information, so these guys went around the world and found these little scraps of info. What they found was a ton of money being flooded into the three carriers.

For Emirates, the biggest chunk that was found was $2.4 billion in fuel hedges that went south. The government just assumed those losses. The rest of the substantiated claims are pretty weak, though there is a lot of unknown here. Emirates is owned by the government and has a lot of sister companies. While the airline does put out audited financials, it doesn’t say whether the transactions between Emirates and its sister companies are at arm’s length. In other words, we don’t know if they’re getting below market price, but the assumption is they are. Still, I think Emirates is really just a sideshow here. It’s Qatar and Etihad that are the most clear cases.

Both Qatar and Etihad have received massive amounts of capital infusion from their governments. They’ve also been loaded up with a ton of interest-free loans with either a very-distant or no timeline for repayment. That may be the way business is done over there, but on a global stage it counts as a subsidy per World Trade Organization guidelines. The UAE and Qatar are signatories, so the WTO rules apply.

In fact, it has been noted (as you’ll see in the docs) that neither Qatar nor Etihad would have been going concerns without massive further investments of capital. They would have and should have gone under until the government poured more money in each time.

There are many more examples of subsidies for those carriers, but you can read the details yourself in the documents. Now, here’s the question… who cares?

Today, the “harm” being inflicted on US carriers is primarily on traffic going beyond these Middle East hubs to India and Southeast Asia. The US carriers don’t have a lot of service in these markets anyway. It’s only through their joint venture partners that this becomes a threat. Even then, we’re not talking about the kind of numbers that will hurt that much.

More importantly, travelers gain incredible new single stop connections that wouldn’t otherwise exist. Think about someone wanting to go from Seattle to Trivandrum. You can connect a lot of dots that don’t get connected as easily otherwise when these gulf carriers are involved. And yes, fares tend to be cheap. At the same time, the damage to US carriers seems to be relatively slight. I don’t see how you can justify curtailing this.

Where I see the real issue, however, is in fifth freedom flights. Of the freedoms of the air, the fifth is becoming one of the more controversial. Fifth freedom rights allows an airline in one country to carry passengers from a second country to a third country as long as the flight starts in the airline’s home country. It was originally created because airplanes didn’t have the distance to connect all the dots around the world. They needed to go somewhere in between, and they needed a way to make those flights viable. Today, that’s rarely the case, but Air New Zealand uses it every day.

Air New Zealand flies from Auckland to LA and on to London because it can’t fly it nonstop. It would be tough to make that viable without being able to carry local passengers between LA and London, so there is an agreement between the two countries to allow that service.

As part of the open skies agreements between the UAE/Qatar and the US, the carriers are allowed fifth freedom rights. But the reality is that these airlines don’t need fifth freedoms. Emirates isn’t flying Dubai-Milan-New York because it can’t fly it nonstop. It flies it because it thinks it can undercut everyone else in the market and use its low costs to its advantage.

If you think about it, the gulf carriers could fly from Dubai to pretty much anywhere in Asia or Europe and then on to the US, causing serious damage to the US carriers. I know some of you still don’t care. If it means cheaper flights with better service across the pond, then so what?

The reality is that it could get really ugly, really fast. If the Middle East carriers skim the international markets with the most traffic, then the US carriers will have to cut back service. When international flights get cut, the whole network becomes vulnerable. The end result is probably less service for smaller and mid-tier cities. It’s just the way the network effect works.

That’s quite a catastrophic prediction, but it could happen if unlimited fifth freedom rights were allowed for carriers with true structural advantages. These airlines have a massive number of airplanes on order and have to put them somewhere.

Of course, it’s never that simple. Etihad owns a huge chunk of Alitalia, which is a joint venture partner of Delta’s. Qatar just bought 10 percent of British Airways parent IAG. How do these things all come together? And what should be allowed?

We won’t know for a long time. The next step would be for the US government to decide that it agrees with this. It can then enter into consultations with the UAE and Qatar to try to resolve the issue. If it can’t be resolved, then the US can pull out with a year’s notice if it wants.

But first, the US would have to decide it wanted to enter into consultations. That’s not a given. We have some pretty powerful military interests in those areas plus a lot of consumer benefit on the table. The offset is potential harm to US airlines if this is allowed to continue.

This web is a tangled one indeed, and there’s no clear answer. One thing that is clear to me is that the US carriers have done nothing to help their case in the public eye so far. This whole thing has been botched from the beginning, first by talking about this report but not releasing it, then by Delta CEO Richard Anderson linking the issue to 9/11. They have dug themselves a huge hole that they have to climb out of.

And what they want isn’t going to ring true with consumers because they can’t see the negative impacts yet. I do think that fences on fifth freedoms may very well make sense. But other than that, it’s hard to see how this should be restricted.

[Original shark photo and original buoy photo via Shutterstock]

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82 Comments on "The US Carriers Show Their Case Against Middle East Carriers, But Will Anyone Care?"

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Eric Morris
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Wake me up when the airlines provide their own security and the TSA goes away, when the FAA stops providing air traffic control and subsidies to airports to build runways, when the military stops providing free training for so many future pilots, when the bankruptcy laws change, when foreign ownership restriction caps are lifted, where airlines don’t get subsidies post 9/11, when the Ex-I’m Bank dies …

Jim
Guest
“Airlines provide their own security” In a way they do as they have to add security and segment taxes into the ticket (making their fares more expensive) “military stops providing free training” You are welcome to tell our men and women in uniform that the value of their contributions is zero, but I disagree. That free training comes at significant personal cost. “The ex-Im dies” The Export Import bank benefits foreign carriers more. Why do you think delta is lobbying so hard to remove its charter? “FAA stops providing air traffic control” Perhaps we should tax the highway to the… Read more »
Eric Morris
Guest

Absent a principled basis such as the Mises-Rothbard non-agression and voluntary exchange ideals, these craven opportunists (see Delta on Ex-Im) will engender no sympathy from me. And I rest my case on the EAS.

In the meantime, I will be glad to enjoy the subsidies offered by tax payers in places where I don’t regularly pay them, such as SC, WA, and IL for Boeing; AL and EU for Airbus; and the ME for these three airlines.

Sean S.
Guest

I know you think by dropping some libertarian theory you think your stance sounds far more consistent and well-thought out than it actually is, but in reality all you’ve done is given yourself a convenient escape hatch to tackling the actual comments that Jim has made. Screaming “This does not match my ideological purity so I don’t have to argue anything!” is not really a legitimate retort.

Jim
Guest
“You are welcome to tell our men and women in uniform that the value of their contributions is zero, but I disagree. That free training comes at significant personal cost.” That’s not the “value” he was talking about. The military trains pilots, and then those pilots fly for the commercial airlines. Effectively, the government is paying for employees of a private business to get trained. That is a subsidy. The personal cost borne by members of the military does not affect the cost to the airline. “This provides an orderly legal process of dealing with shareholders and liabilities. It’s not… Read more »
Beechtalk
Guest
Like hell. The airlines still pay for pilot training. It’s required by the FAA that the pilots go to training on the specific airliner they’re assigned to fly. On a massive economies of scale it still costs probably $10K sim+pilot pay+productivity loss to take a pilot through training. And then the airlines pay for them to go through recurrent training. That’s not subsidized because the pilot was prior military. Where in the hell did you people come up with that??? And a majority of airline pilots (and growing) are from a civilian background and paid for their own training. So… Read more »
Oliver
Guest

“If you think about it, the gulf carriers could fly from Dubai to pretty much anywhere in Asia or Europe and then on to the US, causing serious damage to the US carriers.”

Surely that requires more than the open skies agreement between the U.S. and UAE/Qatar? E.g., in the case of Milan, Italy/EU would have to approve that flight of a non-US/EU carrier from EU territory to the US, I would think.

Gary Leff
Guest
It’s Emirates flying Milan – New York, and that flight was controversial on the Italy side of the equation. And you say yourself Emirates isn’t really so relevant to this discussion. The issue isn’t ripe for examination. The concern here is transatlantic flights between Europe and US which would compete against US carriers. And that really isn’t happening now. This would be an issue at the point where those flights begin in a material amount. Until then the issue just isn’t ripe, and shouldn’t be a US government priority – precisely for the security and consumer interests mentioned in the… Read more »
John
Guest

Don’t forget the CRAF money US airlines get every year from the military.

Ascot
Member

I don’t think CRAF really counts here. US carriers participante in CRAF and are required to make aircraft available for military missions. In exchange the governement pays for some of the expenses associated with making the aircraft available for the military.

malbarda
Member
I think the chapter 11 argument that the Gulf carriers make is probably also a valid one. I think the issue is that all airlines, US, EU or Gulf based, operate under business rules that are deemed “normal and acceptable” in their country of origin. The WTO might have an opinion if asked, but getting to that point will take a long time, provided the US government even wants to create that conflict with their military & anti-terrorism partners in the Middle East. Why do airlines in Europe really go bankrupt, whereas in the US they are deemed too important… Read more »
FrequentFlyer
Guest
You can’t fault the airlines for Chapter 11. They can enter Chapter 11 and emerge from it only if there is someone there to provide capital for the business plan. It’s not a question of importance (unlike the banks and automakers during the great recession where the US government invested capital). If no one was there, they would have to enter Chapter 7 (?) and liquidate. The fact that Europe does not have a similar policy is their loss. Nothing is stopping EU governments from enacting similar policies if they feel that is a problem. I don’t see how Gulf… Read more »
Gary Leff
Guest

“You can’t fault the airlines for Chapter 11. They can enter Chapter 11 and emerge from it only if there is someone there to provide capital for the business plan.”

1) American went into Chapter 11 without debtor-in-possession financing, so this is false.
2) Why is being able to obtain new capital when the government lets you break contracts (and in some cases foist pension obligations onto the Pension Benefit Guarantee Corporation) a meaningful distinction of subsidy vs not?

Jean-Luc Picard
Guest

The airlines have consolidated themselves to a point where we the flying public are being held hostage to one fee after another. They have become so arrogant that while fuel prices fell off the edge of the cliff, the airlines, while quick to tack on surcharges, refused to credit their customers.

The quality of domestic US mega-carriers compared to their European counterparts is, at best, shameful. They’ll be the first to whine when the Government re-imposes regulations but will do nothing to stave off that possibility.

There must be a middle ground between cheap fares and basic minimal creature comfort.

jeff
Member
I agree the airlines that imposed seperate furl surchargers (mainly it was international, US airlines haven’t had then recently) should have reduces/eliminated those fees. But to say that airfare should go down becuase fuel did in the US makes zero sense. Airlines have the right to charge whatever they can get and they still run at a pitiful 10-15% profit margin right now. You have Congressman wanting to investigate airfares at that margin but Apple is ok selling the iPhone with margins in the multiple-100s%. The airlines are bringing in a lot of profit right now in total dollars but… Read more »
XlF42
Guest
1. Gulf carriers have a geographic advantage: With current long rangers, they can reach almost any populated spot on the globe non-stop (Airbus has some nice mapping feature for their fleet on the web page and I guess, Boeing has something similar). So they have a very nice advantage without any government subsidizing them, and (that’s the sad part), there’s nothing competition in the US or Europe can do about it (continental drift will be too slow to change that). 2. Compared to the US carrier, the European ones suffer more as the Asia/Africa market is way more important for… Read more »
Xnuiem
Member

*slow clap* Contentential drift….Bravo

MeanMeosh
Guest
“and esp. in the Central-Europe -> India distance (which is one I frequently fly), Emirates has a superior product (as well inflight as well as timing as well as price)” Have you ever flown EK’s 777 in coach? I’d hardly call it a superior product. Sure, you have a dazzling IFE system, but you get the same surly FAs and horrendous seat comfort in their 10-abreast configuration that you do on US and European carriers. Emirates has done a great job of bamboozling the avgeek crowd about how great they are thanks to their (admittedly superior) premium class experience, but… Read more »
Nevsky
Member

I think the Delta and the other US carriers should be required to finance a White Paper of how consumers were damaged by the airline mergers.

Frankly, I would consider letting some of the foreign carriers operate in the US as long as they use US crews.

The only competition left in the US airline business is between the carriers to see which one can pay its CEO more.

One comment above, which I strongly disagree with, is the one against the Ex-I’m Bank. The Bank strongly helps American industry and especially the the American aircraft industry.

Jim
Guest

Letting foreign carriers operate domestically would be fascinating. However other governments would not likely allow the same in their skies.

As for the EX-IM Bank: it definitely helps American industry more. howver, my comment was limited to carriers.

John
Guest

I think not allowing Richard Branson to own 51% of Virgin America is a great example of how legacy airlines benefit from thier campaign contributions.

Eric Morris
Guest

Please avail yourself of Timothy P. Carney regarding the Ex-Im Bank and hopefully you will see the error of your ways.

Jon
Member
US airlines – that continue their fuel surcharges with cheap oil, gut their award programs, cut snacks and reduce seat pitch so much in Y that their customers are attacking each other when one reclines – calling out Gulf Carriers for their conduct is a pretty good joke. If I were a politician, there’s no way in hell I’d come to the rescue of DL’s profits. As others have pointed out, our own airline industry was heavily subsidised by the USPS on behalf of the Federal government, and that sort of support continued for decades. Also, what does AA think… Read more »
Sean S.
Guest
Considering the attempts by the Big 3 to put the squeeze on their workers, I don’t have a ton of sympathy for them, but that said, there is no doubt that intercontinental travel to an extent covers losses on flying from Poughkeepsie. If the margins there get slashed then you will see a ripple effect down the line that will, ironically, have a negative impact on consumers in small to mid tier airports. While people complain about not having enough non-stops at their airport, the reality is non-stops in many situations are unsustainable, and hub flights are only sustainable as… Read more »
Eric Morris
Guest

Is the current fee regime for ATC and AIP sustainable? Was the TSA security fee adequate to cover the costs prior to last year’s budgetary kabuki? This Anarcho-capitalist assumed Jim knew those answers so didn’t feel necessary to correct him. (I admit I will gratisously mention/slur Ex-Im any chance I get.) I’m pretty sure military aviation training is for the “common defence” and not to help Doug Parker make more.

Kilroy
Guest
From a consumer standpoint, I would LOVE to be able to fly foreign carriers domestically. Heck, even 3rd-world airlines (LLoyd Aereo Boliviano comes to mind, on a flight from LPB to EZE via Santa Cruz) have better in-flight service than most US airlines. Even if you lose some marginal US destinations through the network effect, how much of an economic impact would that really have? I would wager that most of the smaller US airports are within 90 or 120 minutes of another (more sustainable) airport, with the exception of a few extreme examples that are currently financed by EAS… Read more »
Alex Hill
Member
In addition to the direct subsidies, the labor treatment of the Middle Eastern airlines is deeply and explicitly against US labor standards and gives them an unfair advantage over US airlines. ( and , for example, for Qatar Airways.) In particular, the requirements for exit visas for flight attendants to leave Qatar, restrictions on marriage, and short contracts which allow the employer to exclude any flight attendants who aren’t young and beautiful are beyond the pail. There are bad things to say about airline labor unions in the US, but they’re presence has made all of these things as well… Read more »
Alex Hill
Member

Oops; I guess the comment software won’t let me post links to the news articles I was citing. But others can Google them as well as me. :)

John
Guest

Sounds like the Gulf airlines are all fans of Ayn Rand.

David SF eastbay
Member
How do you spell cry babies, AADLUA. Almost since the beginning of passenger air service, countries had a ‘national’ carriers where the government pretty much paid the bills for so it’s not like it’s anything new. US carriers didn’t care much about India until the world changed and everyone started having call centers in India and traffic picked up. On a globe, the USA and India are a long ways from each other, so it’s not like having a lot of nonstop service from different U.S. cities to say Canada/Mexico/the Caribbean. Carriers in Europe/Aisa/MIddle East can do a better job… Read more »
zup
Member

Maybe, maybe we should outsource all of Silicon Valley computer workers with low paid Chinese techs. That way, we can have cheaper computers and cheaper real estate in the Bay Area of San Fran….

lenniefalcon
Member

Competition=lower fares=good for consumers. When was the last time Delta or United gave a crap about the flying public. Compete or perish!

BTW CF, you shouldn’t be commenting on things you don’t understand nor have any business trying to explain international business competition to your readers. You went to school where and have a degree in what? You have participated in international business experience for how many years?

James S
Guest

Pretty sure CF has years of experience working for multiple airlines, an MBA from one of the top business schools in the country, and is regularly sought out to provide commentary on the airline industry by television and print news. How’s that compare to your “international business experience”?

Bob
Guest

What about the subsidies, marketing money, reduced or eliminated landing fees, grants, etc that the US carriers receive from airports and local and state governments to make service work? They look like subsidies to me.

What about the carriers this is helping? JetBlue has been very successful with partners like Emirates.

David
Member

You are right, I do not care about the effect on US carriers. If American stops gouging at DFW maybe it would have traction but looking at it holistically there is plenty of “subbsidy’ of American now, although in another sense. It is a big world, deal with it.

gbarrett
Member

This is simple. We should show exactly the same sympathy for the US carriers that they have shown us…which is none. I have flown Emirates, and in every class of service, they are simply better. Why in the world would we support paying higher fares for crappy service, no loyalty to their passengers, and ignoring the subsidies the US government gives to its carriers.

Bill Hough
Guest

Maybe I should care. However, when I think about all the issues cited by Eric Morris in the first comment and then reflect on how DL, UA and AA have adopted a customer-unfriendly business model that quotes a rock-bottom fare and then nickel-and-dimes you for ever thing that was part of the fare a decade ago, I end up on the side of the so-called ME3. Plus the domestic airlines benefit from a sheltered domestic marketplace since foreign airlines can’t fly domestic routes. Why the heck should I care about DL’s whining?

Darkwater
Guest

Does anyone know if there’s been a good write-up on the collapse of the quadpartite ownership structure of Gulf Air? I can certainly understand Qatar’s and Abu Dhabi’s preference to control their own airlines versus subsidizing one that’s headquartered in Bahrain, although at least some of Gulf Air’s losses could be attributed to the inefficiencies of having headquarters and operations functions parceled out among the other owner-states as consolation prizes. But it seems to me that the amounts of money thrown at QR and EK easily dwarf the contributions Qatar and Abu Dhabi made to GF.

Darkwater
Guest

EY, not EK.

fs5720572us
Member

Middle East Carriers do not allow passengers with Israeli passports on their airlines. They are also heavily subsidized by their middle eastern countries. Do we want them to be rewarded for anti-Semitism and handouts from their countries? I don’t!

Andrey
Guest

I can understand how the issue of subsidies is painful in a country like the USA with multiple carriers all theoretically having the right to equal or no state subsidies. But I cannot understand why the UAE/Qatar governments can’t subsidise their state-owned carriers, since a) they are the only carriers of each entity, b) they are state-owned anyway.

Jim
Guest
Cranky, when you say “today, the “harm” being inflicted on US carriers is primarily on traffic going beyond these Middle East hubs to India and Southeast Asia. The US carriers don’t have a lot of service in these markets anyway,” that is circular logic. The reason US carriers don’t have a lot of service in those markets is partially due to the subsidized competition. If these airlines weren’t subsidized, the US carriers would likely have more service in those markets. I have to say that this report is a lot more impressive than I expected. There is actual evidence of… Read more »
Jamzz
Guest
I read through the 55 page document and found it quite interesting. There are a lot of assumptions made to get to the $42 Billion number, but they seem mostly reasonable. I did not like the “Equityworthiness” argument about Etihad and Qatar. I think people/entities sometimes invest money in projects they think will create returns over the long term even if the short-term losses are bad – especially in airlines. If it weren’t this way, certainly Virgin America would be dead by now. Cranky, the one thing left out of your post that will be critical in the government’s response… Read more »
Oliver
Guest

Think the European airlines are bigger fans of the ME3? They are probably working on a similar complaint to be submitted to the EU.

Olamide
Guest

Is there anything besides labor laws that keep the big 3 from having bases in the Middle East and operating flights from These regions?.

JoeBoo
Guest
As an American, I am embarrassed for these US Airlines crying about the ME competition, so sad. Rather than improve their product (hard & soft) to compete, they just raise the white flag… Trying to secure government intervention, ban competition…reeks of desperation. I am a small business owner, if I don’t constantly innovate, provide superior customer service, bust my tail to ALWAYS put the customer first; then I don’t deserve the business, period. Why don’t the US based airlines have this same philosophy? because they don’t have to. They know that US consumers don’t have a choice (domestically)…so they just… Read more »
Cedarglen
Member
Good article and some excellent points. Honestly, I do not know what to think. I’m not opposed to Fifth Freedom practices and agree that U.S. airlines should be allowed full access rights. That said, thy don’t really want to – or will not – based on soft product. (The triad of Gulf airlines nearly always offer better service-for-dollar.) I’ve flown all three Gulf carrier at least once. I’ve dumped Qatar based on business and personnel practices and I think their CEO is a jackass. The other two remain in the running, based on service and net cost. Those flights tend… Read more »
MeanMeosh
Guest
” While the airline does put out audited financials, it doesn’t say whether the transactions between Emirates and its sister companies are at arm’s length. In other words, we don’t know if they’re getting below market price, but the assumption is they are.” If this is true, then it’s a very big deal, although in a different context. Complex intercompany transactions, run through a series of related shell entities, at prices and/or fees that do not equate to market value is basically the scam Enron ran. You can debate whether buying goods from related parties at below-market rates constitutes a… Read more »
rob382
Member
I can tell the CEO’s of the US-based carriers the difference. I am surprised they don’t know, although, having experienced American airline standards recently, it doesn’t surprise me in the least they have no idea. Having just done over 20 flights in 28 days last month in Premium, I can honestly say they are appalling. I find this with all US based carriers. In Australian slang, we call it “a bloody rip-off mate”. Price paid for quality delivered is an absolute shocker. The simple answer is this: Lift your game. Check this out. I am about to do LAX-DXB-CMB in… Read more »
James S
Guest
This is the best assessment of longhaul premium travel on the US3 I think I’ve ever read. From start to finish, the entire experience is about the employees and making their jobs easier. You’ll eat when they tell you, get up when they let you, and receive a smile if they feel like it. Only very rarely is it about the passenger and his/her needs. When you fly with an international carrier – and particularly with the ME3 – the difference is astonishing. There’s nothing “ageist” about calling the problem what it is: old, tired crews who’ve lost their service… Read more »
TC99
Guest
This is a major reason why unions can prevent improvements from happening. Instead of higher performing employees getting the premium assignments, it is based on seniority. In the real world, I would lose my job if I got complaints about my service or failed to do my job in a safe and customer friendly manner (I am in a customer service based industry). The senior employees (not all) have no reason to improve their performance because their pay is based on the seniority. Also, any union employee the company wants to terminate must go through a process that the union… Read more »
iahphx
Member
I know there is little sympathy for the US carriers because people feel the service should be better (it should be better, and basic ticket prices should also be higher). That said, it is beyond foolish to think the US carriers should/could compete with the Middle East airlines on “service.” The only reason that this level of service exists is because it is heavily subsidized. I don’t think most folks would want the US gov’t to be throwing billions at AA, DL and UA so they could provide a better in-flight product. While the full extent of the Middle East… Read more »
rob382
Member
IAHPHX, Subsidies, are you kidding? What do you think Chapter 11 is? It’s a giant subsidy from American taxpayers. Basically the airline went broke, they declared bankruptcy, they stole money from their suppliers who never get paid and the taxpayer funded them. Isn’t that a subsidy? AA, UA both did it. Without those subsidies there would be no UA or AA. We can only dream. But this issue has absolutely nothing to do with subsidies. It’s about Customer Service and Quality of product. The US airlines need to stop worrying about what the others are doing, focus on themselves and… Read more »
zup
Member

I agree that the U.S. Airlines need improvement, but airlines like Qatar treat their cabin staff like almost slaves. If you want to quit, you have to pay a bond and you can’t even leave the country. Try researching how the middle eastern airlines treat their employees and then not feel guilty about flying on them. Maybe you should wake up!!

dtseo14
Guest

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billyshearer
Member

AA should not expect any support from IAG… Willie Walsh today:

“We are a long way from the fully deregulated global industry I would like to see. It is also worrying to see protectionism rearing its head again, notably in the US where some carriers complain the open skies arrangements are benefitting non-US airlines, most particularly the Gulf carriers,” Walsh said.”

Alex Hill
Member

As Cranky noted, that’s 10%-owned-by-Qatar Airlines IAG.

The Double Sunrise
Guest

A couple of thoughts:

How is what the ME3 doing any different from the good old days of Pan Am et al, when the American airlines ruled the skies and flew to every corner of the world? Times change.

Consider the considerable hub and spoke operations American airlines have to serve SE Asia from Japan / HK. Is it not unfair to the local airlines flying those routes?

It should be trivial for American airlines to serve India with a similar arrangement based out of HK or even DOH. I think DL does some routes in partnership with KLM to India.

mirabella
Guest

It’s curious that none of the above comments include complaints about the service provided by the “aging” pilots who fly international routes for Delta, United and American.

Olamide
Guest

Now that sir is funny :-)

zup
Member

What about the aging pilots of the ME3. What’s the difference? There’s not many Middle Eastern pilots and everyone one else is an expat. ??

mirabella
Guest

Zup, just for clarification, my comment was made tongue-in-cheek…….it appears that “age” in the flight deck is perceived more favorably than “age” in the cabin, no matter the carrier.

dv_s
Guest

Instead of blaming other airlines, they should travel once from emirates or Qatar which they called lower carries. Service is so far superior and professional. Be prepare for fare competition then common habit to put all competitors at bay with US lobby.

Forrest Spears
Member
I could care less how the Big Three of the Gulf region maintain their businesses… gov’t support, few taxes, ready reserves of fuel, low labour costs… they provide incredible service and value at any level of class and, what the Big Three of the US don’t get, they hub for the world! I can leave from my home airport of Milan MXP, fly to Dubai and then go practically anywhere in the world… Cape Town, Sydney, Lima and even to secondary cities too. I also can hop a Emirates flight to JFK! Delta in the lead, American & United following… Read more »
kt74
Guest

Everyone should read this from the FT:
http://www.ft.com/cms/s/0/522738cc-cbcf-11e4-aeb5-00144feab7de.html
“The truth is that most of the Gulf success stems not from illicit subsidies but from innovation, exploiting their advantages fairly and making a bet that paid off. Good luck to them.”

LukeG71
Guest
What if the reign of Emirates is soon to be over? With new planes that can fly unbelievable distances with great fuel efficiency like the A350 and 787, and the 777X and A330neo down the line, European and American airlines are better equiped now than ever to serve Asia non-stop. What if the Dubai stop is no longer needed? Its not like this hasn’t happened before. Here in Ireland this exact scenario unfolded in the 1960’s at Shannon. During the 50’s Shannon was booming with stopover traffic but when jets arrived in the 60’s there was no need for the… Read more »
Jon
Member
The US airlines, at least, aren’t falling behind because of technology. The Dubai stop already wasn’t needed at all. The ME3 are just a recent addition to global networks, if anything. Dubai/Qatar/Abu Dhabi all inserted themselves into the global conversation by rapidly expanding their route networks to become indispensable to airlines that were cutting routes left and right. US and EU airlines already fly to the popular Asian destinations. They fly as far as India, Australia, and Hong Kong – direct. There’s no “need” to route through the ME for those places. It’s the smaller (but growing!) destinations that US… Read more »
rob382
Member

Without a doubt this is the most informed and sensible comment I have read on this piece. Put succinctly and to the point. But most of all, it’s right. Thanks for the informed contribution to this discussion.

LukeG71
Guest

Well then it appears that better service truly is the only way for US airlines to combat the ME3. Maybe they’ve already realised this, but it would take a lot of finance the likes of ME3’s service and quality. Even European carriers that are miles ahead of the American ones need to improve. The only difference is that now American carriers have the profit and finance, EU airlines on the other hand.

Bill Hough
Guest
During the past decade, government approval of airline mergers has resulted in the creation of a customer-unfriendly oligopoly which colludes to offer horrible customer service while nickel-and-diming their customers with endless nuisance fees. Travel writer Joe Brancatelli sums it up the best: “Americans dislike the oligarchy that the U.S. carriers have created and they hate the service and policies that they offer. Moreover, Americans like competition and they love the kind of cut-throat, price-slashing competition the Gulf carriers have brought to air travel.” Delta got the government to look into “ME3” subsides per http://www.reuters.com/article/2015/03/19/us-airlines-competition-regulator-idUSKBN0MF07D20150319 Before making an issue of potential… Read more »
Lou
Guest
I just flew the AA DFW-HKG route and have flow QR to DOH a number of times. The hard product of the 1-2-1 on the AA 777 is better than the 2-2-2 on the QR 777 flying out of the US. In fact, the AA 1-2-1 config, while being the same ‘reverse herringbone’ as the QR 787 config, was better customized to provide more personal space for the passenger. The soft product was not as good. While the FA were ok, it seemed a little rude of one of them to walk away as I was talking to them and… Read more »