ATLANTA — Travelers in Augusta, Savannah and similar cities could lose some airline connections unless Persian Gulf airlines stop taking government subsidies to compete unfairly, a coalition of business and domestic aviation groups warn.
The coalition, which includes the Savannah Area Chamber of Commerce, Delta Air Lines and others, conducted a news conference Thursday in Atlanta to call on the governments of Qatar and the United Arab Emirates to stop pumping money into the state-owned airlines Emirates, Etihad Airways and Qatar Airways. They say the practice violates the international Open Skies agreements.
“If unfair competition is permitted in contradiction to the current Open Skies policy, service to all U.S. communities will suffer as our domestic airlines are forced to reduce flights,” said Atlanta Mayor Kasim Reed.
None of the Gulf airlines flies into Georgia, but Qatar Airways recently announced direct flights between Atlanta and Doha beginning next July as part of a 25 percent increase in U.S. capacity it and other Gulf carriers have slated.
“The Gulf carriers’ aggressive subsidy-fueled expansion into the U.S. market has already started to push U.S. carriers off of international routes, and if that continues, U.S. airlines will be forced to also trim domestic service to small and mid-sized airports,” said Billy Linville of the McKenna Long law firm.
That can trigger what the industry calls “mode shift” where travelers from smaller cities decide to drive to a hub airport to take a cheaper flight. As that increases, carriers serving those smaller airports have to raise prices or cut service to break even, which prompts even more mode shifting, Linville said.
But the Gulf airlines dismiss the accusations that they’re benefitting from improper subsidies.
Akbar Al Baker, group chief executive for Qatar Airways, said in a May news conference of his own that the claims were “baseless” and an attempt by Delta, United and American to limit competition and consumer options.
“U.S. Open Skies Agreements are about offering choice — the ability to fly with the airline you prefer, to regions which are under-served by U.S. carriers,” he said. “The Big Three want to restrict choice. World travelers would suffer if they succeed.“
Chris Clark, president of the Georgia Chamber of Commerce, called on the Obama administration to enforce the subsidy prohibition, which a recent report tallied at $42 billion.
“(We) urge the U.S. government to take action to remedy unfair competitive practices that are hurting our state’s economy and threatening jobs here and across the country,” he said. “Fair, market-driven competition is the foundation of our economy.”