American Airlines chief insists Gulf carriers 'subsidised'

American Airlines chief insists Gulf carriers 'subsidised'

American Airlines restated its call for the US government to tackle "subsidised competition from the state-owned" Gulf carriers at the World Travel and Tourism Council (WTTC) summit last week.

Scott Kirby, American Airlines president, told the WTTC summit in Dallas: "We're competing with subsidised carriers."

He described Emirates, Etihad and Qatar Airways as "the biggest threat to competition that aviation has seen" and said: "We can't compete with $50 billion in subsidies."

American Airlines joined Delta Air Lines and United in submitting a 55-page dossier to Washington last year alleging the Gulf carriers received more than $40 billion in government hand-outs and claiming it had distorted the market.

The US government began an investigation last April. The Gulf carriers have dismissed the claims as "misleading", "ill-founded" and "false".

Kirby told the summit: "We're in favour of open skies when there is fair competition. We'll compete with anyone but we can't compete with governments."

He rejected the counter claim by the Gulf carriers that American, Delta and United had benefited from government support during the bankruptcy protection each has passed through.

Kirby said: "Ask our employees who took a hit. Ask our creditors who took a hit. There was no government subsidy."

Lufthansa executive board member Karl Ulrich Garnadt warned: "You ain't seen nothing yet with the Gulf carriers.

"In Europe, the Gulf carriers operate seven times the capacity of European carriers between Europe and the Gulf. They dominate traffic between Europe and Asia."

Garnadt said: "Open skies is good so long as the competitive landscape is level, so long as the regulatory framework is the same for everyone.

"We want transparency. We want rules and regulations on which both sides agree. We want business models that are transparent, not that we can't really see what the business model is."

Lufthansa, an alliance partner of United, has previously complained of "unfair competition" by the Gulf carriers in Europe.

However, Willie Walsh, chief executive of British Airway's parent International Airlines Group, has dismissed the US carriers' allegations despite BA and Iberia having a transatlantic partnership with American Airlines.

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