Release #: 15.20
May 28, 2015
ALPA to DOT: Seek the Facts on Middle Eastern Airline Subsidies
Risk to U.S. Airline Workers from Unfair Marketplace Escalates Daily
Washington, D.C.–In comments submitted today to the U.S. Department of Transportation, the Air Line Pilots Association, Int’l (ALPA) reinforced its call for the U.S. government to quickly seek consultations with the United Arab Emirates (UAE) and Qatar on market-distorting subsidies those governments give to Emirates Airline, Qatar Airways, and Etihad Airways.
“The tens of billions of dollars in massive and sustained subsidies with which the UAE and Qatar governments support Emirates Airline, Qatar Airways, and Etihad Airways are radically eroding fair competition in the global marketplace,” said Capt. Tim Canoll, ALPA’s president.
A recent white paper released by the Partnership for Open & Fair Skies, of which ALPA is a member, shows that these airlines have received $42 billion in subsidies and other unfair benefits since 2004. These subsidies, as defined by internationally-accepted standards, include direct government assistance to cover operating losses and repay debt.
Evidence of these subsidies comes from the Middle Eastern airlines’ auditors and legal filings. Moreover, several of Etihad’s and Qatar’s auditor statements have publicly acknowledged that without government involvement, the airlines may not have had the capability to stay in business.
“The enormous and sustained financial support from the UAE and Qatar governments to Emirates Airline, Etihad Airways, and Qatar Airways has already harmed U.S. passenger airlines as they compete in the international marketplace,” continued Capt. Canoll. “It is foreseeable that the harm from the unfair economic advantages these airlines hold will only grow in the future and pose an even greater risk to the free market, U.S. airlines, and U.S. airline workers’ jobs.”
An economic study released on May 15 shows that, rather than stimulating new passenger demand, Emirates Airline, Etihad Airways, and Qatar Airways are diverting passengers from U.S. airlines and their alliance partners to their global network hubs. The findings show that while the number of average daily seats between the United States and Dubai, Abu Dhabi, and Doha have increased by nearly 11,000 seats per day, the average daily bookings for travelers between those cities and the 11 U.S. gateways to which these airlines fly increased by only 240––a gap that shows the flights aren’t attracting new passengers but, rather, pulling them from U.S. airlines and their alliance partners.
The economic threat posed by the UAE and Qatar government subsidies has drawn sharp reaction from Capitol Hill. Prompted in part by outreach from ALPA pilots, 262 members of Congress sent a letter on April 30 to U.S. Secretary of State John Kerry and U.S. Transportation Secretary Anthony Foxx urging them to request consultations with the UAE and Qatar. In addition, Chicago Mayor Emanuel has also called on the U.S. government to open consultations, as have the mayors of Salt Lake City, Charlotte, Detroit, Houston, Fort Worth, and Atlanta.
“There’s no question that U.S. cities and communities of every size have a stake in making certain that U.S. airlines do business in a fair marketplace, which is exactly what the U.S. air services agreements require,” said Capt. Canoll. “To safeguard the free market, the U.S. government must get the facts on these subsidies through consultations with the governments of UAE and Qatar and request a freeze on passenger capacity and routes while consultations are underway.”
Founded in 1931, ALPA is the world’s largest pilot union, representing more than 51,000 pilots at 30 airlines in the United States and Canada. Visit the ALPA website at www.alpa.org or follow us on Twitter @WeAreALPA.
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CONTACT: ALPA Media, 703-481-4440 or Media@alpa.org