Why Qatar Airways submits report to US gov’t to refute subsidies claim?

Qatar Airways has submitted a ‘white paper’ to the United States Government which fully refutes the subsidy allegations levelled against it by the Big 3 US carriers.

The detailed submission addresses all issues raised in the Open Skies debate, which has put into question the longstanding US policy of allowing carriers to fly to and from the United States with minimal government interference.

The Big 3 – American, Delta and United and their unions have been pressing the US Government to depart from its pro-Open Skies stance and impose unilateral limits on the services operated by Gulf airlines.

But in its report, Qatar Airways said that many of the market changes complained of by the Big 3 are not the product of “unfair competition” but are instead the byproduct of important advances in aircraft technology and significant demographic changes.

The Doha carrier also said that although US carrier market share to the Indian subcontinent may have shifted over time, the market as a whole has grown, and US carriers are carrying more traffic in absolute terms.

Qatar Airways also refuted the claim that its services harm any US carrier, noting that it does not compete against any US carrier on any nonstop route, and serves cities that have never been served by US carriers, such as Cochin, Karachi and Amritsar.

“In fact, the services operated by Qatar Airways benefit US carriers. Qatar Airways works cooperatively with and feeds traffic to US carriers, including American Airlines and JetBlue,” the airline added.

The report also said that the airline’s operations to the US market have significantly contributed to the economy in terms of jobs, cargo and overall passenger traffic. As of today, the airline has 162 aircraft flying to 150 destinations, of which over 40 percent are Boeing jets worth over $19 billion.

Qatar Airways group chief executive Akbar Al Baker said: “Qatar Airways was a relatively unknown airline when it first launched a service to the United States in 2007.

“Since then, we have built up a significant brand presence on the routes that we operate to the United States. Our passengers have come to know us, not through size alone, but by the signature service and quality of the product on board – and also the breadth of our network.

“There has been significant demand for our services from the US not just to the Middle East – but beyond – where no other carriers fly. This makes us a natural choice for consumers, and is a reflection of how globalised our world has become. People are travelling further than ever before and it is important that in an economy focused on open market principles, our wings remain open for business, rather than closed.”

Qatar Airways also claimed that its services are lawful and consistent with the US-Qatar Agreement.

Al Baker added: “The US Government should reject calls to “freeze” the US-Qatar Open Skies Agreement, and recognize these allegations for what they are – a transparent attempt by the Big 3 to block air services that compete with their own.”

Qatar Airways also rebutted each of the subsidy allegations made, noting that US carriers benefit from many of the same policies they have attacked.

While Qatar Airways said it is used to strong competition, it expressed concern about the efforts of the Big 3 to persuade the US Government to refer to rules that do not apply to aviation to resolve their complaints.

Al Baker said: “It is puzzling to see the biggest US carriers describe Qatar Airways as a ‘threat’ given our small size and lack of direct competition with them. Their long-standing focus on other markets, and large (and growing) profits completely undercut this claim.

“The Open Skies model was developed by the American carriers and has demonstrated how an Open Skies paves the way for an open economy. We are concerned to see the Big 3 seek to change the rules of the game as soon as they see US consumers respond well to the services offered by a competitor.”