Reuters logo
UPDATE 1-U.S. lawmakers seek answers soon on Gulf airline subsidy claims
May 14, 2015 / 10:52 PM / 3 years ago

UPDATE 1-U.S. lawmakers seek answers soon on Gulf airline subsidy claims

(Adds new charges and response from Etihad Airways)

By Jeffrey Dastin

May 14 (Reuters) - U.S. lawmakers have stepped up pressure on the Obama administration to take a stance on allegations that three Gulf airlines received market-distorting subsidies, asking it to answer several questions by May 20.

In a letter released to media on Thursday, 19 House Judiciary Committee members including its Republican chairman and ranking Democrat said they wanted to know whether the government was aware of foreign airline subsidies, and if so, how it would respond to them.

There are no international subsidy standards governing airlines, which is forcing the Obama administration to chart new territory.

The May 20 deadline comes before the Obama administration has said it will conclude its review of the subsidy claims. It solicited comments on the issue from interested parties last month and said it would begin reviewing them by the end of May.

U.S. airlines say that Gulf-state subsidies amounting to $42 billion let Emirates, Etihad Airways and Qatar Airways lower prices and push competitors out of certain markets, which those airlines have denied.

Etihad, meanwhile, on Thursday charged Delta Air Lines Inc , United Continental Holdings Inc and American Airlines Group Inc with receiving more than $70 billion in government support since 2000, via U.S. bankruptcy protection, pension guarantees and tax benefits.

“U.S. carriers have been benefiting and continue to benefit from a highly favorable legal regime,” Etihad general counsel Jim Callaghan said in a news release.

Jill Zuckman, spokeswoman for a U.S airline-union coalition known as the Partnership for Open & Fair Skies, said Etihad’s claims were “baseless” and “distract from the real issue” of Gulf subsidies.

Two weeks ago, more than 250 members of Congress signed a letter urging the administration to seek consultations with Qatar and the United Arab Emirates over the alleged subsidies.

The government has said it takes the U.S. airlines’ concerns seriously but is committed to the Open Skies policy that authorizes flights to and from foreign countries.

The Cargo Airline Association also on Thursday called on the government to reject protectionist changes to the Open Skies agreements with Qatar and the UAE, saying its members could not operate without these and other treaties.

International Consolidated Airlines Group SA, known as IAG and parent of British Airways, said most carriers have benefited from some form of state support.

Qatar Airways was IAG’s second-biggest shareholder, after Capital World Investors, as of March 25. (Editing by Ted Botha)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below