Qatar Airways wants to buy 10% of American Airlines Group Inc.  (AAL) , the Fort Worth, Texas, based company said Thursday, June 22, but the airline said in a filing that it didn’t solicit the proposed investment.

American shares rose 2.6% on Thursday to $49.68.

The Allied Pilots Association, which represents American’s pilots, blasted the offer.

“This is an action of aggression by the Qatar government and we take strong offense to that,” said APA spokesman Dennis Tajer.

“They are flush with cash because the government is subsidizing them,” Tajer said. “Now they want to come into our house and start buying the furniture.”

“This has got to be stopped,” he said.

In a statement Thursday, Qatar Airways said it “believes in American Airlines’ fundamentals and intends to build a passive position in the company with no involvement in management, operations or governance.

“Qatar Airways has long considered American Airlines to be a good oneworld Alliance partner and looks forward to continuing this relationship,” the carrier said. Qatar Airways plans to make an initial investment of up to 4.75% {and} will not exceed 4.75% without prior consent of the American Airlines board.”

American, United Continental Holdings Inc. (UAL) and Delta Air Lines Inc. (DAL) are locked in a battle with Qatar, Emirates and Etihad over the Gulf carriers’ efforts to expand in the U.S. while being heavily subsidized by the governments of Qatar and the United Arab Emirates.

In mid-morning trading, Delta shares rose 0.75% while United gained 0.18%.

The European Union will propose stricter rules on Thursday to allow the region’s airlines to challenge perceived unfair competition from overseas rivals.

Read the rest on: WSJ.Com

Competition from the global exchange of goods and services benefits consumers and countries, while unfair competition penalizes those who play by the rules and erodes confidence in the rules themselves. That’s why it’s essential that international agreements governing free trade are upheld.

Accordingly, Secretary of State Rex Tillerson and Secretary of Transportation Elaine Chao should read and heed the letter sent from the eight members of Minnesota’s delegation to the U.S. House — as well as a letter from Minnesota Sen. Amy Klobuchar and five Senate colleagues from both parties — urging the U.S. government to enforce the Open Skies agreement with Qatar and the United Arab Emirates.

Support for free-trade pacts will decline even further if the public doesn’t have the confidence that they will be enforced. It’s critical for the airline sector and the economy at large for the U.S. to take the steps necessary to ensure a free — and fair — environment for airlines.

Originally found on: StarTribune.Com

Competition from the global exchange of goods and services benefits consumers and countries, while unfair competition penalizes those who play by the rules and erodes confidence in the rules themselves. That’s why it’s essential that international agreements governing free trade are upheld.

Accordingly, Secretary of State Rex Tillerson and Secretary of Transportation Elaine Chao should read and heed the letter sent from the eight members of Minnesota’s delegation to the U.S. House — as well as a letter from Minnesota Sen. Amy Klobuchar and five Senate colleagues from both parties — urging the U.S. government to enforce the Open Skies agreement with Qatar and the United Arab Emirates.

In fact, according to an analysis from the Partnership for Open and Fair Skies, which includes Delta, American and United as well as several key airline-sector unions, every daily long-haul, round-trip flight lost to a Gulf carrier due to subsidized competition results in a net loss of 1,500 U.S. jobs.

Free markets aren’t so free when one side has its thumb on the scale.

That’s the gist of Delta Air Lines’ argument as it makes its case about a competitive threat.

The situation pits Delta and the nation’s other top airlines against aggressive, state-owned — and subsidized — carriers from certain Middle East countries. There is concern that aggressive, subsidized expansion by airlines from Qatar and the United Arab Emirates will undermine U.S. carriers, ultimately jeopardizing airline connections, service and jobs.

The risk and the remedy — enforcing “Open Skies” agreements between the United States and other nations that govern industry competition — are receiving due notice, including attention across the political divide from all eight Minnesota members of the U.S. House.

The carriers — Emirates, Etihad Airways and Qatar Airways — are using subsidies to launch international service that would not be possible without government backing, explains a letter from Reps. Keith Ellison, Tom Emmer, Jason Lewis, Betty McCollum, Rick Nolan, Erik Paulsen, Collin Peterson and Tim Walz.

Their letter in April to Secretary of State Rex Tillerson and Transportation Secretary Elaine Chao says that the Mideast carriers’ subsidies — amounting to more than $50 billion — foster new routes that come “at the expense of U.S. airlines’ international networks, American jobs and ultimately will harm consumers.”

It notes that Emirates, for example, now offers round-trip flights from New York City to Milan, Italy, and Athens, Greece, that “would not be viable without subsidies.”

The lawmakers contend that subsidized flights will “shift passengers away from U.S. carriers and hurt service to U.S. hubs, as well as the small- and medium-sized communities they serve.” Their letter also expresses concern that “as subsidized capacity continues to grow, U.S. international and domestic connecting flights may be discontinued, leading to a loss of good-paying aviation jobs in our state.”

Sen. Amy Klobuchar was among a bipartisan group of her colleagues signing a similar letter to the Trump administration earlier in the year. It notes repeated statements from the president that strong enforcement of international agreements will be central to administration policy.

The Middle East carriers shouldn’t have access to our market if they violate the trade agreement, Delta’s Chief Legal Officer Peter Carter told the editorial board.

Delta’s work on the issue in the Partnership for Open & Fair Skies brings it together with two other so-called “legacy” carriers, American and United, as well as labor unions representing airline workers.

That combination of fierce competitors and bargaining-table adversaries should “tell you something’s going on,” said Carter, a former partner at the Minneapolis-based Dorsey and Whitney law firm.

If left unchecked, the Mideast carriers will continue to expand in the United States, pushing out U.S. airlines and harming hard-working Americans, according to the partnership. It has engaged airline employees in the effort, including lobbying their representatives in Washington.

Carter, who also made a presentation at a recent meeting of the Metropolitan Airports Commission, cites disruption in airline markets in Europe and Australia, for example, that has displaced such once-dominant carriers as Lufthansa and Qantas.

We should note that not everyone agrees. A lengthy rebuttal on the Emirates website disputes the claim that it benefits from subsidies and says the carriers misstate the Open Skies agreement. Meanwhile, a coalition of four passenger and cargo carriers says the major airlines don’t speak for the industry.

But Delta’s concern resonates here, where the Northwest Airlines legacy runs deep, even after their merger in 2008.

We don’t underestimate the importance of Delta’s hub at Minneapolis-St. Paul International Airport and the competitive advantage it provides for Minnesota businesses — and the state’s economy.

Fast, efficient connections for businesses and entrepreneurs — and leisure travelers, too — are a key to the region’s economic well-being. That’s something to protect.

Article original found: TwinCities.Com