United, Delta Air Lines and American Airlines want trade deals changed, arguing that government subsidies give Gulf rivals an unfair edge. That's rich, considering the bailouts, antitrust exemptions and other goodies the three have received over the years.
The turbulence arose over so-called Open Skies agreements, which permit US and foreign airlines to serve each other's home market. Qatar and the United Arab Emirates breached their deals, the American carriers claim, by giving Emirates, Etihad Airways and Qatar Airways more that $40 billion in tax breaks, airport freebies and other subsidies since 2004, which allows them to offer below-cost services. The companies deny they are unduly subsidised.
Open Skies pacts typically require "fair competition." Unlike agreements governed by the World Trade Organization, though, they don't explicitly penalise the use of subsidies. That makes it tough for the airlines to contend that the deals in this case should be renegotiated.
Besides, American carriers have gotten their own handouts, most notably $15 billion in cash and loan guarantees after the September 11, 2001 attacks. Those were extraordinary circumstances, and few airlines took advantage of the guaranty program. At the time, though, many critics argued that the weakest carriers should be allowed to fail.
What's more, trustbusters tend to give large US airlines a pass when they team up with KLM, Lufthansa and other foreign rivals to coordinate fares, service and capacity. Customers may get more travel options but often at higher prices, while the companies earn a fatter profit, according to 2012 research by US Justice Department economists.
The three carriers' case is also undermined by opposition from the likes of JetBlue Airways, Boeing and FedEx - all of which benefit from the Open Skies pacts. Boeing, for example, sells aircraft to Emirates while JetBlue and the airline have a code-sharing agreement, meaning they cooperate in operating some flights. FedEx operates a major hub in Dubai to serve India, Asia and Africa.
The real problem may be that the Gulf carriers are in a stronger position to compete. Any subsidies aside, they have relatively young, fuel-efficient fleets that cost less to operate. That's one advantage that no amount of whining to Uncle Sam is likely to overcome.
