Trump administration holds talks with airlines, keeps pressure on Gulf carriers

American Airlines aircraft are parked at Ronald Reagan Washington National Airport in Washington, US on Aug 8, 2016.
American Airlines aircraft are parked at Ronald Reagan Washington National Airport in Washington, US on Aug 8, 2016. PHOTO: REUTERS

WASHINGTON (REUTERS) - The Trump administration met with major airlines on Tuesday (Dec 12) to discuss complaints that some Gulf states are unfairly subsidising state-owned carriers, keeping up pressure on the Middle East airlines at the centre of a spat with US rivals.

US and Gulf airlines representatives met at the US State Department with administration officials to discuss the status of the government's review of complaints about subsidies. A State Department official said there would be no announcement after the meeting, but officials plan new talks with Gulf states starting this week.

Heads of the three largest US passenger carriers - American Airlines Group Inc, United Continental Holdings Inc and Delta Air Lines Inc - have urged the Trump administration to challenge the conduct of three major Middle Eastern carriers under "Open Skies" agreements signed in the early 2000s.

The US airlines contend the Gulf carriers are being unfairly subsidised by their governments.

The airlines, Qatar Airways, Etihad Airways and Emirates , have denied those accusations. The Gulf airlines operate around 200 flights per week to 12 US cities.

President Donald Trump told airline executives in February he recognised they were facing pressure from foreign carriers, but added that he wanted foreign airlines also to do well.

"They come with big investments, in many cases those investments come from their governments, but they are still big investments," he said.

In a Sept 14 White House memo seen by Reuters on Tuesday, Trump administration officials agreed the US government"should take action to address the unfair behaviour of Gulf carriers."

It said the government should "seek disciplines on subsidies, transparency and state owned enterprises" and consider withdrawing from the Open Skies agreements if"sufficient progress is not made."

The Partnership for Open & Fair Skies, which includes Delta, American, United and some major airline unions, on Tuesday applauded "the Trump administration for taking action to level the playing field with the Gulf carriers and their massive government subsidies", spokeswoman Jill Zuckman said.

But US smaller airlines grouped under the US Airlines for Open Skies Coalition said their larger rivals "still cannot point to a specific violation" of the Open Skies agreements.

It said it was "confident further investigation by the Trump administration will show the claims for what they are: a political ploy to protect themselves from competition and limit choice for US travellers".

The coalition represents Atlas Air Worldwide Holdings Inc , FedEx Corp, Hawaiian Airlines, and JetBlue Airways Corp.

US Travel Association President and CEO Roger Dow also said on Tuesday: "We strongly oppose any efforts to reduce secure travel, connectivity, growth and consumer choice."