The long-brewing dispute between U.S. legacy carriers and Gulf carriers continues, as American Airlines ends its codeshare relationships with Etihad Airways and Qatar Airways.
On June 29, American Airlines informed the two Gulf carriers of its decision to end the codeshare relationship, stimulated in part by Qatar Airways’ CEO Akbar Al Baker referring to U.S. flight attendants as “grandmothers.” The CEO later apologized for the remarks, saying, “I should like to apologise unreservedly to those offended by my recent remarks which compared Qatar Airways cabin crew with cabin crew on U.S. carriers.”
While an Etihad spokesperson claims American’s decision is “anticompetitive and anticonsumer,” as it will reduce choices for customers and may result in higher fares, Qatar Airways still plans to take a 10 percent stake in American Airlines via public stock purchase.
The Open Skies Agreement calls for a “fair and equal opportunity to compete,” which U.S. legacy carriers claim Gulf carriers violate by taking a combined $50 billion in illegal government subsidies to support operations.
American Airlines isn’t the only U.S. carrier taking bolder action. Earlier this month, Delta Air Lines ramped up its rhetoric with a video warning its employees unchecked expansion by the Gulf carriers poses a significant threat to U.S. legacy carriers.
In the video, Delta CEO Ed Bastian, says, “They’re dumping seats into the market. We can’t compete. They’re running us out of our markets. They’re doing it by taking our jobs, taking our routes. They’ve done it in Europe, they’ve done it in Asia, they’ve done it in Australia, and the next step for them is to do it in the U.S.”
In the video, a spokesperson defends Delta’s position in the situation, saying, “You give us a level playing field, and we can compete with any airline,” a statement Bastian himself expressed at this year’s annual Global Business Travel Association Convention in Boston.
Despite these warnings, Gulf carriers slowed U.S. growth in the past three years. In April, Emirates cut back on flights to five of the 12 U.S. cities served in the United States. Daily flights from Dubai (DXB) to Fort Lauderdale (FLL) and Orlando (MCO) were cut to five a week, and flights to Seattle (SEA), Boston (BOS) and Los Angeles (LAX) are now once a day, instead of twice.
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