Americans for Fair Skies, and the tens of thousands of aviation workers who have spoken up in support of our effort, sends its sincere appreciation to President Trump and his Administration for taking meaningful action to end the illegal and anti-competitive subsidies provided by the State of Qatar to its state-owned airline, Qatar Airways.
Without government subsidization, Qatar Airways would have been insolvent a long time ago. No private investor would invest in a company with so much red ink on its books. In 2017 alone, Qatar Airways received nearly $500 million in illegal government subsidies from the State of Qatar. This is on top of the more than $26 billion (that’s “billion” with a “b”) in government subsidies that Qatar Airways has received since 2004. These massive subsidies are in direct violation of Qatar’s Open Skies aviation trade agreement with the United States. They allow the airline to engage in predatory seat dumping, distorting the international marketplace and force U.S. airlines that play by the rules to abandon once-profitable routes, costing Americans jobs.
Thankfully, President Trump has stepped up and said no more. As the President said in his State of the Union speech last night, “The era of economic surrender is totally over.”
As we wrote about earlier this week, the Trump Administration announced that it has entered into an agreement with the State of Qatar that cracks down on their aviation trade cheating. The agreement forces Qatar Airways to use internationally agreed upon accounting and auditing standards and apply commercial terms to all transactions. Additionally, the agreement will make sure Qatar Airways pays its share of what it costs to operate out of its international airport instead of allowing that tab to be picked up by its government owners.
This transparency will allow the U.S. government to ensure that Qatar Airways operates free from state-subsidization going forward, or, if they continue to cheat, be held accountable for their distortion of the marketplace. The successful negotiation by the Administration brings us one step closer to the level playing field that must exist in the international aviation industry. The U.S. must now hold Qatar accountable and enforce the terms of this agreement. A4FS will remain vigilant on behalf of American aviation workers and expose any foul play on Qatar’s end.
The Trump Administration has also received an important commitment that Qatar Airways will not introduce any 5th freedom passenger flights to the United States. This tactic, employed by other carriers around the world that are not subsidized, allows airlines to carry passengers between two nations without stopping in the airline’s home country. By ensuring that Qatar Airways will not operate 5th freedom routes into the United States, the Administration precludes the carrier from undercutting U.S. airlines and their employees in the competitive transatlantic market by artificially increasing seat capacity. These same guarantees must also be obtained from the United Arab Emirates.
The UAE’s two largest international carriers, Emirates and Etihad Airways, are also massively subsidized by their state owners. This illegal and unfair reality should be likewise exposed and brought to a close. Emirates, an airline fueled by subsidies from the Dubai government, currently flies subsidized 5th Freedom routes from Europe to the U.S., distorting the marketplace and depriving U.S. airlines and their workers of the right to compete on fair and equal terms. Future negotiations by the Trump Administration should bring transparency to the UAE subsidies and address related party transactions between the airlines and other government owned entities. We anticipate the same leadership that the Trump Administration showed in its negotiations with Qatar to be exercised in its dealings with the UAE.
The UAE’s two largest international carriers, Emirates and Etihad Airways, are also massively subsidized by their state owners. This illegal and unfair reality should be likewise exposed and brought to a close. Emirates, an airline fueled by subsidies from the Dubai government, currently flies subsidized 5th Freedom routes from Europe to the U.S., distorting the marketplace and depriving U.S. airlines and their workers of the right to compete on fair and equal terms. Future negotiations by the Trump Administration should bring transparency to the UAE subsidies and address related party transactions between the airlines and other government owned entities. We anticipate the same leadership that the Trump Administration showed in its negotiations with Qatar to be exercised in its dealings with the UAE.
Join us in thanking President Trump for his leadership on trade enforcement and for standing up for U.S. workers by putting an end to Qatar’s illegal aviation subsidies.
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