US ‘rejected early freeze’ on Gulf airlines’ expansion

Federal regulators declined to freeze expansion in the US by three Arabian Gulf carriers while reviewing whether they’re unfairly subsidised, American Airlines’ chief executive Doug Parker said.

US officials turned down the request by American Airlines, Delta Air Lines and United Continental because they don’t want to take any action while the review is still going on, Mr Parker said in an interview at Bloomberg’s New York headquarters on Tuesday. “They are doing their due diligence,” he said.

The US trio has complained that Emirates, Qatar Airways and Etihad Airways have received more than $40 billion in government support, providing an unfair competitive advantage. The US airlines say the gulf carriers are adding as many flights as possible while regulators decide whether to seek talks over the issue.

“There is urgency around the issue I hope they appreciate,” Mr Parker said. “It’s just too important.”

The three Gulf carriers repeatedly have denied that they’ve been supported by subsidies from the governments of Qatar and the UAE.

Those airlines have increased capacity to the US by 25 per cent since American, Delta and United first raised their concern about the subsidies in January, Mr Parker said. The aid to the Gulf carriers is being used to increase US flights and offer discounted connections through Middle Eastern hubs to win international traffic, the US carriers have said.

“If it’s allowed to continue or proliferate, there is real risk to the US aviation industry,” Mr Parker said. “It’s not hyperbole. It’s a fact.”

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