Bullying in the Airline Business?

Earlier this month, at a press conference in Los Angeles, the CEO of Qatar Airways, His Excellency Mr. Akbar Al Baker, once again said he and his airline were being “bullied” by U.S. airlines, notably American and Delta. The notion that he and his lavishly subsidized, state-owned carrier from one of the richest countries on earth could be bullied is silly; worse, misusing the term “bully” trivializes a serious issue for children and adolescents worldwide. As someone who 1) understands the airline business and 2) got beat up fairly often as a kid, he’s not being bullied.

Reducing the rhetoric from nasty and hyperbolic to calm and factual, the issue is quite clear. U.S. airlines and seven unions, backed by scores of U.S. Senators and members of Congress, asked the Obama administration last year to consult with the governments of Qatar and the United Arab Emirates to address the massive subsidies provided to their state-owned airlines. For a year now, the U.S. carriers have proven that the massive government subsidies have enabled the Gulf carriers to expand rapidly in the U.S., Europe, and across the globe.

A painstaking global investigation revealed the $42 billion in cash and unfair benefits the three Gulf carriers have received over the last decade from their government sponsors. An investigation of this magnitude was the only way to unearth the truth because the three Gulf airlines do not publish financial statements that meet Western standards for transparency and completeness. The wheelbarrows of cash violate the “Open Skies” aviation agreements that the governments of the United Arab Emirates and Qatar signed with the U.S., pacts that prohibit subsidies and mandate a level competitive playing field. This unfair competition has damaged U.S. airlines (and their European partners) and threatened good-paying U.S. jobs.

Some airline observers believe that Mr. Al Baker lashes out precisely because he’s not credible. Three examples: first, at the Paris Air Show last June, he announced that Qatar Airways earned a profit of $103 million in its previous financial year. Just a soundbite, no details. Revenues? Total expenses? Return on equity? Mr. Al Baker didn’t offer those salient details.

Second, in response to the proof that Qatar Airways had received subsidies and other unfair benefits totaling more than $17 billion since 2004 (about 40% of the total for the three Gulf airlines), he has repeatedly denied the state support without offering a shred of independently-verifiable financial data. “Trust me” seems to be his modus operandi. If he’s got contrary evidence, why not produce it?

Third, he has repeatedly tried to convince the marketplace and the media that his employees are treated fairly. However, the UN’s International Labor Office and others have shown clear patterns of abuse and inequity in a workforce comprised of 90 percent migrants, mostly from poor countries. At Qatar Airways, a flight attendant can be fired for positioning her hat incorrectly, or applying too much hair gel. More broadly, the Gulf carriers’ labor strategy is suspiciously simple: hire lots of people (mostly attractive young women) from poor countries, give them a short, fixed-term contract, treat them badly, dismiss them easily (sometimes without a ticket home), and repeat. To Mr. Al Baker and his counterparts at Emirates and Etihad, the supply of job candidates is virtually unlimited. Now that looks more like bullying, and on a global scale.

Not only does Mr. Al Baker lack credibility, but his behavior is threatening and abrasive. Three more examples. First, on a 2015 trip to the Netherlands, he saidthat European companies would win Qatari state contracts only if their governments allowed Qatar Airways to expand. To their credit, the Dutch authorities promptly said “no thanks” to further Qatar growth at Amsterdam, one of the first times a nation has stood up to Mr. Al Baker. At a time when all three Gulf mega-carriers are attempting to convince us that they are not instruments of the state, Mr. Al Baker’s quid-pro-quo threat clearly suggested otherwise.

Second, his criticism of U.S. and European airlines is extreme and mean-spirited. At a recent Los Angeles press conference, he mocked Delta, noting that his airline doesn’t “fly old, crap, second-hand airplanes.” And this from a 2012 speech on the eve of new service from Montreal: “My crew, my cabin crew, is a maximum of 35 years old. Not 65 years old, you are used to in [sic] flying American carriers.”

Third, his continuing personal attacks on Delta Air Lines CEO Richard Anderson are totally unwarranted. Among other nastiness, Mr. Al Baker said: “He’s just a bully. And he’s a liar . . . He has no dignity, he has no ethics.”

Arm-waving and rhetorical fireworks won’t resolve this issue. Instead, the Obama administration should invite officials from the UAE and Qatar to discuss the matter and put American jobs ahead of endless government subsidies. U.S. airlines seek no special favors, no “protection” from a bully – only a competitive environment on a level playing field.

Originally Published on Huffington Post.

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