US and Qatar About to Announce Settlement in Open Skies Dispute

Just a week and a half ago Delta’s CEO was backing off criticisms of Emirates and Etihad while focusing on Qatar. He probably knew at that time that it would become his way of declaring victory despite consistent defeat.

Delta has led the charge with United and American behind to gut U.S. Open Skies agreements with the UAE and Qatar, limiting flight options for consumers and asking the government to force a raise in airfare prices.

They claimed the 3 Gulf airlines were heavily subsidized, while ignore subsidies to other airlines and even to themselves (and exaggerating the extent of those subsidies, going so far as to fabricate claims in their white paper).

Their lobbying went nowhere in the Obama administration. They put their chips behind Donald Trump’s protectionist rhetoric, but the Gulf carriers buy Boeing and Delta does not. However Qatar needs to curry favor with the U.S. after the Trump administration emboldened the UAE and Saudi Arabia against them.

Meanwhile Delta’s CEO emphasizes that it’s Qatar which is their real target, despite talking about Emirates, Etihad and Qatar in tandem for 3 years.

[T]he Delta CEO is quick to note that the Emirates, Etihad, and Qatar Airways are anything but a monolith.

“I’m not sure they’re all the same,” Bastian told Business Insider in a recent interview. “I think there are three different business models between the three. We have to be careful we don’t to group them together.”

…Qatar Airways is just a government agency that bleeds money,” Bastian told us. “If you look at their financial results, they weren’t the worst performing airline in the world, Alitalia and Air Berlin were worse than them. Qatar was third.”

Now comes word that an agreement between the US and Qatar has been reached and is expected to be announced on Tuesday.

  • Qatar will provide greater financial transparency
  • Qatar will not offer flights between the U.S. and Europe

Of course Qatar hasn’t flown between the U.S. and Europe. Instead their strategy has been to invest in airlines that do — such as British Airways parent IAG and Meridiana.

This will eliminate an area of friction between the U.S. and Qatar, and allow Delta to claim victory, without Qatar Airways having to give up anything of significance.

Since the agreement covers only Qatar and not Emirates or Etihad it’s unclear what the future of the Delta, American, and United campaign looks like. Qatar is likely the most subsidized of the 3 carriers. Qatar’s CEO is the most likely to say offensive things. So they’ve been the target of US airline racist attacks. Will they be emboldened by progress, or stalled by the removal of their juiciest enemy?

(HT: Jonathan W.)

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. “Of course Qatar hasn’t flown between the U.S. and Europe.”

    Recently, this is of course true – and their interest these days in offering non nonstop service to US is likely quite limited, so the problem is indeed theoretical.

    However, FWIW, back in the day, I used to fly QR between Geneva and Newark (QR83/84), so I suppose they still have this, and likely other US Europe route-authorities that they could have availed of if they’d wanted to.

  2. Yes its maiden US service was Doha – Geneva – Newark, but they eliminated European connecting service replacing it with US non-stops to Doha because they’re not trying to compete in the transatlantic market but rather carrying US passengers to India, Pakistan, etc.

  3. The only winner here is Qatar Airways and good on them for taking it to the Seppo’s. The Best airline in the world trumps the poor old fragile Yank airlines.

    Agan.

    The Qatar CEO Mr Baker has run rings around them again. The delivery of the A350-1000 is imminent and I hope like hell Qatar announce the first route to Atlanta and really rub it in the face of that recalcitrant dickhead, Bastian and his Chapter 51 baled out poor excuse for an airline.

    Bastian should be fired forthwith.

    After all the bullshit he has lied to the Seppo’s about in relation to Qatar, and getting Open Skies reviewed, nothing changes except a few more zeros added onto Bastian’s salary.

    Fire the bastard and whack someone in their who knows what they are doing and can actually run an airline. The guy is a tosser

  4. An earlier poster is talking about delusions? I would submit that, even at its peak, Pravda would not have had the chutzpah to utter Gary’s opening line:

    “Just a week and a half ago Delta’s CEO was backing off criticisms of Emirates and Etihad while focusing on Qatar. He probably knew at that time that it would become his way of declaring victory despite consistent defeat.”

    This statement is as absurd as if Hillary had said she won by losing to Trump. No Fifth Freedom and fiancial disclosure. We’ll see what that disclosure really looks like, but this is EVERYTHING the US airlines want at this point. You can read more at Bloomberg if you don’t trust “Pravda Gary” for your ME3 news.

  5. In the real world, what will get interesting is what Etihad and Emirates do,, I think they could agree to no Fifth Freedom, but I don’t think they’ll be willing to disclose financials. They’re too ridiculous to release, and they’ve pretended too much that their numbers were “real.” So then we’ll have to see what Trump does in response.

  6. Soooo…no routes they have any interest in flying, and a financial disclosure that even you admit we have no idea what it “really looks like.”

    Yup, Qatar got crushed in that deal. Thanks for giving us the real truth.

  7. @vet — when you are prosecuting a case, you pick off the easiest target to the first. That is Qatar.

  8. Somebody round here seems to watch waaaaayyyyyy too much Faux News!

    I’ll take “Pravda Gary” anytime over Faux & Friends, crazy Sean Hannity, and the biggest gasbag of them all, Rush Limbaugh…

    ANY-TIME!

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