Last week, President Trump hosted Sheikh Tamim bin Hamad al-Thani, the Emir of Qatar, at the White House.
The two leaders discussed Middle East security and peacekeeping efforts, and celebrated a Qatar Airways agreement to purchase five American-made Boeing 777 cargo planes.
While the order is good news for beleaguered Boeing, which is still reeling from the crashes and groundings of its 737 Max jets, Trump should’ve used the opportunity to hold Qatar and Qatar Airways accountable for a devious scheme to violate its Open Skies agreement with the United States.
Open Skies pacts are intended to level the playing field among international carriers by eliminating government subsidies to airlines and curtailing political involvement in business decisions such as routes and pricing. The agreements are very common; the U.S. maintains Open Skies arrangements with 126 countries throughout the world. In an overwhelming majority of instances, the agreements are followed and respected. America’s Open Skies pact with Qatar is a rare and troubling exception.
After using tens of billions of dollars in government funds to underwrite Qatar Airways, the Persian Gulf nation signed an Open Skies agreement and pledged to stop funneling subsidies to the airline. Just last year, however, Qatar was suspected of again using tax dollars and other government funds to subsidize Qatar Airways.
The Trump administration responded by renegotiating Open Skies to end the illegal subsidies, increase Qatari financial transparency, and freeze new Qatar Airways routes to the United States.
Unfortunately, Qatar was back to its old ways before the agreement was even finalized. Qatari officials concocted a shady way to sidestep Open Skies and both subsidize an airline and launch new routes to America.
Qatar Airways purchased a 49 percent stake in Meridiana, an insolvent regional Italian airline, and rebranded the carrier Air Italy. The new airline operates as a thinly veiled proxy for Qatar Airways, illegally ignoring Open Skies guidelines by offering service to five U.S. cities and pocketing millions of dollars in subsidies from the Qatari government.
Secretary of State Mike Pompeo promised members of Congress the Trump administration is working to address the problem.
“I have personally engaged in this issue and we are working to make sure every party to those agreements complies with every element of those agreements. The U.S. government sees what’s going on…,” Pompeo told lawmakers. “It’s not fair. It’s not right.”
In the meantime, though, Qatar’s Air Italy charade is making Congress and the administration look ridiculous.
Air Italy uses Qatar Airways jets to fly passengers served by crewmembers wearing variations of Qatar Airways uniforms. Until a few months ago, Air Italy’s Chief Operating Officer, Chief Flight Officer, and Vice President for Sales and Distribution were all Qatar Airways executives. Air Italy operates in the red and requires funds from Qatar Airways – and, ultimately, subsidies from the Qatari government – just to stay in business.
By ignoring its Open Skies agreement with the U.S., Qatar is jeopardizing the relationship between two strong allies. The situation is also setting a terrible precedent that the United States is willing to look the other way when countries aren’t playing by the rules – a precedent that could have dire consequences when it comes to trade and military negotiations in the future.
It is imperative that President Trump hold Sheikh Tamim to his commitment to the Open Skies agreement — and send a message to Qatar that disregarding the pact will no longer be tolerated by the United States.
Originally Published on The Economic Standard.