Following a U.S. government decision to award a government contract for travel between Washington, D.C. (IAD) and Dubai (DXB) to a foreign airline, United Airlines will drop service between the two areas early next year.
The General Services Administration awarded a government contract to subsidize flights for approximately 15,000 government employees, including military personnel, to rival JetBlue and its codeshare partner Emirates, which will operate the U.A.E. flights.
United Airlines announced the decision to end flights as of January 2016 is based on its inability to compete with “the entry of subsidized carriers such as Emirates and Etihad Airways.”
“As they’ve added subsidized capacity, our Washington–Dubai route has become less profitable,” according to the company.
United, Delta Air Lines and American Airlines have alleged Emirates as well as Etihad Airways and Qatar Airways received subsidies from their governments enabling them to buy more aircraft and decrease fare prices. The three Gulf carriers denied the allegations.
A month after United Airlines drops flights in January, Delta Air Lines plans to end all flights between Atlanta (ATL) and Dubai due to overcapacity on routes to the area as a result of the expansion of Emirates, Etihad and Qatar, now serving 12 U.S. cities with approximately 200 flights per week.
The GSA gave the contract for 2016 to JetBlue in August. As JetBlue does not fly to the United Arab Emirates, codeshare partner Emirates will operate the route.
The Obama administration is considering whether to begin discussions with the United Arab Emirates and Qatar regarding the subsidy allegations on behalf of the U.S. airlines’ requests, according to Fortune.
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