IAG quits Brussels trade body over Gulf airlines row

IAG quits Brussels trade body over Gulf airlines row

International Airlines Group has quit the Association of European Airlines (AEA) amid a row over the threat posed by fast-expanding Gulf carriers.

The British Airways and Iberia parent company said its airlines had pulled out because of a difference of opinion with other members of the Brussels-based trade body.

Both BA and Iberia were withdrawing from the AEA because their position on "some important policy issues" no longer aligned with those of other member airlines.

"We believe global liberalisation of our industry is fundamental to our future growth and we are not willing to compromise on this fundamental matter," IAG told Reuters.

IAG has been partially owned since January by Qatar Airways, which bought a 9.99% stake in the group for about £1.15 billion.

IAG played a key role in bringing Qatar Airways into the Oneworld airline alliance that is led by BA and transatlantic partner American Airlines

But American Airlines, Delta Air Lines and United Airlines last month accused Emirates, Etihad Airways and Qatar Airways of having benefited from $42 billion in state subsidies over the past decade.

IAG's competitors Air France-KLM and Lufthansa, which are members of AEA, also complain Gulf airlines are benefiting from unfair subsidies such as interest-free government loans and cheap fuel.

Gulf carriers, which have grown rapidly by adding routes via hubs in Dubai, Abu Dhabi and Doha, deny the accusations.

Etihad Airways president and chief executive James Hogan highlighted growing resistance by “protectionist competitors” in Europe to European Commission transport commissioner Violeta Bulc earlier this week.

“Etihad Airways is committed to Europe. But growing resistance to us from a handful of protectionist competitors could have unintended consequences well beyond limiting our development,” he said.

“If our growth is curtailed or our investments in airlines are compromised, the real damage will be to Europe in lost jobs, lost flight connectivity, lost investment in local and national economies and lost consumer choice.”

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