American Airlines ends Codeshare Partnerships With Etihad and Qatar as Gulf Fight Intensifies

Trump Administration Holds Strategy Meeting on UAE and Qatar Open Skies Agreements

By: Theo Nichols

July 13 2017

American Airlines

American Airlines has cut its codeshare agreements with Qatar Airways and Abu Dhabi-based Etihad Airways effective March 24, 2018.

"In light of our ongoing dispute over the Open Skies agreements, American Airlines notified Etihad Airways and Qatar Airways on June 29 of our decision to terminate our code-share relationships. Given the extremely strong public stance that American has taken on the ME3 issue, we have reached the conclusion that the code-sharing relationships between American and these carriers no longer make sense for us,” American said in a statement.

However, American Airlines will still maintain interline agreements with both Etihad and Qatar, allowing passengers and cargo to transition between American and its gulf partners with ease. As fellow Oneworld Alliance members, American and Qatar have an even closer relationship--albeit a rocky one.

The fight between the gulf carriers and the US legacies has intensified in the past week after Qatar announced it was acquiring up to a 10% stake in American Airlines, a move that was not taken kindly by American CEO Doug Parker. Then on Friday the gulf spat hit a new low when Qatar Airways CEO Akbar Al-Baker said that “There is no need to travel on those crap American carriers. You know you will always be served by grandmothers.”

The three major U.S. legacy carriers--American, United, and Delta--allege that the three major gulf carriers--Emirates, Qatar, and Etihad--receive billions in unfair government subsidies. The US3 want the US government to renegotiate its open skies agreements with the United Arab Emirates and Qatar to curb the rapid growth of the gulf carriers.

The US3 hope that the protectionist rhetoric of President Donald Trump will translate into action against the gulf carriers. Politico (paywall) reported that Donald Trump held a strategy meeting last week on the UAE and Qatar open skies agreements. The meeting was attended by National Economic Council Director Gary Cohn, White House Trade Adviser Peter Navarro, Chief of Staff Reince Priebus, and other administration officials. The administration is considering several options ranging from restricting the number of flights between the UAE and Qatar and the United States, canceling the open skies agreements with the two nations outright, or restricting certain routes.

Currently, the gulf carriers have had very little impact on US carriers and the US market as a whole, save for increasing connectivity and passenger flows between underserved destinations in the Middle East, North Africa and South Asia and the United States.

The US3 are mostly concerned with future growth in gulf carrier operated fifth freedom flights between Europe and the United States (such as Emirates service between Newark and Athens), which has the possibility of disrupting the US3 hegemony over the all-important transatlantic market.

american airlines qatar airways etihad airways gulf subsidy fight open skies

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