Three big U.S. airlines are battling Boeing, FedEx and others over the Open Skies agreement and what that means for competition in the Gulf. Fred Katayama reports.
It's sky wars: three big U.S. airlines versus a domestic plane maker, express delivery company and others. The battle is over the Open Skies agreements, which allow airlines to fly routes they want in each other's countries. Boeing likes them because the pacts help Boeing sell more planes overseas. And FedEx likes them because they help them deliver more packages. But Delta Air LInes, United and American have been ambivalent about liberalizing air travel. They want the White House to probe the financial statements of their Gulf rivals for allegedly receiving more than $40 billion in government subsidies. Qatar Airways, Emirates, and Etihad Airways deny those charges. Reuters recently reported that U.S. carriers have lost market share to their Gulf rivals in India and the nearby region. FedEx says the U.S. airlines are being protectionist. The domestic spat aside, the feud between the U.S. and Gulf carriers has taken a nastier turn. Emirates hinted at possibly taking legal action. And its president says U.S. carriers would be better off focusing on improving their service. Last week, Delta's CEO made remarks that were perceived as linking the Gulf carriers with the 9-11 attacks. New York University law professor Michael Levine said, "The entry into the fray of Boeing and the others ... will make it easier politically for the administration to do what I believe the Department of Transportation wants to do, namely, to continue to pursue its successful Open Skies strategy." The Obama Administration says it's reviewing the claims. But it hasn't made any decisions.