Qatar Airways CEO: 'No Cause' To Revisit Open Skies Pact
Fighting back against subsidy charnges, Al Baker claims major U.S. airlines are tightly controlling their preferred markets to keep prices high.
Qatar Airways CEO Akbar Al Baker responds to subsidy allegations during a press conference in Washington, D.C. (Photo: Bill Carey)

Revisiting open-skies agreements with Persian Gulf nations because of unfair trade allegations by major U.S. airlines is unnecessary, declared the chief executive of state-owned Qatar Airways. “There is no cause for these negotiations to be opened,” CEO Akbar Al Baker told reporters on May 13.

During a press conference in Washington, D.C., Al Baker pushed back against a contentious effort by American, United and Delta airlines to modify or scrap open skies agreements between the U.S. government and those of Qatar and UAE. The U.S. airlines allege that Persian Gulf carriers in the last decade have reaped $42.3 billion in improper subsidies from their government owners. In April, the U.S. government announced that it will conduct a formal review of the charges.

The chief executives of Dubai-based Emirates and Abu Dhabi-based Etihad Airways, the other Gulf carriers implicated in the dispute, have previously responded to the charges in different venues in the U.S. capital. Al Baker said the open skies agreement the U.S. and Qatar signed in October 2001 benefits both nations. Among benefits, he cited Qatar Airways’ operation of 37 Boeing 777s, eight 777 freighters and 21 787 Dreamliners, 20 Gulfstream business jets its executive division has ordered, and GE and Pratt & Whitney engines.

No American airlines offer nonstop service between the U.S. and Doha, Qatar Airway’s base; instead, they prefer to serve mature markets in the domestic U.S., Europe, Latin America and the Caribbean over destinations in the Middle East, Africa and Southeast Asia, Al Baker said. American, United and Delta have also benefited from government support, he declared.

The big three U.S. airlines “cannot in any way prove that there is any harm that is happening to them from our operations in your great country,” Al Baker said. “They say they are threatened by global overcapacity and falling yields from the Gulf competition. The prevailing fact is telling a different story. The U.S. carriers are tightly controlling capacity in their home market to keep prices high,” while at the same time “enjoying record profits.”

On the issue of subsidies, Al Baker said: “The Big 3 use a broad definition of subsidy for us, but a narrow one for themselves. Many around the world view Chapter 11 bankruptcy protection…as a form of subsidy. Ironically, Delta is complaining about our subsidy while fighting with the state of Georgia about the continuation of its fuel-tax breaks and many other subsidies that they receive.”

During a question period, the outspoken Al Baker called out the International Air Transport Association (IATA) for “sitting on the fence” by not taking a position in the dispute among its members, claimed American Airlines CEO Doug Parker has been “misled” in  the campaign against the Gulf carriers and derided U.S. airlines for providing “crap” service. He said he plans to discuss the dispute with both Parker and IATA director general Tony Tyler during IATA’s annual general meeting June 7-9 in Miami.

The airline held the press conference at the five-star Hay-Adams Hotel, which borders Lafayette Square opposite the north face of the White House. While Qatar Airways flight attendants offered guests dates and Arabic coffee in a ninth-floor reception room, demonstrators at street level staged a noisy “free south Yemen” protest that could be heard by the attendees above. The demonstration coincided with meetings President Barack Obama is holding with Gulf Cooperation Council leaders, including the emir of Qatar.