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AMERICAN AIRLINES CUTS TIES WITH GULF PARTNERS OVER ALLEGED SUBSIDIES

Date published 17.07.2017

AMERICAN Airlines is to end its code-share agreement with the Gulf carriers, following a continuing dispute over their alleged subsidisation by their respective governments. The US carrier confirmed last week it was cutting ties with Etihad and Qatar Airways and had notified the two Gulf airlines of its decision at the end of June.

AA maintained there would be no financial impact but “In light of our ongoing dispute over the Open Skies agreement… [and] given the extremely strong public stance that American has taken on the ME3 issue, we have reached the conclusion that the code-sharing relationships between American and these carriers no longer make sense for us. This decision… is an extension of our stance against the illegal subsidies that these carriers receive from their governments…” Etihad said the cancellation of the code share would be applied in March 2018.

The Gulf carriers continue to deny allegations that government financial backing has allowed them to compete unfairly.

The Citizen newspaper said Qatar Chief Executive Officer Akbar al-Baker had fired back and claimed he was disappointed by the decision but said: “If this is a way for them to make us reduce or stop our operations to the United States, we are not going to do so.”

Qatar is still believed to be attempting to acquire 10 percent of American Airlines, despite its offer being rejected out of hand earlier this month.

A representative for Etihad continued: “We have enjoyed a mutually beneficial code-share relationship since 2009 that has provided passengers flying to and from the United States with more and better flight options to points in the Middle East, Indian Subcontinent and other destinations that historically have not been served by US airlines. The Etihad Airways / American Airlines relationship continued notwithstanding our differences on the so-called ‘Open Skies’ political dispute.

“We view the decision by American Airlines as being anti-competitive and anti-consumer. This action will reduce choices for consumers and may result in higher fares for travellers to and from the United States.

“Etihad Airways and many of the leading consumer and business groups in the United States have categorically rejected the allegations of American and the two other dominant US carriers regarding violations of the relevant air transportation agreements. Etihad Airways’ six daily flights to the United States in no way threaten American Airlines.”


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