Fri, Jul 14, 2017 page11

• American Airlines-Qatar Airways feud intensifies

  TAUNT, APOLOGY: The US firm ended a codesharing deal with two of the top three Middle East carriers, while it was accused of harming consumer rights

  • Bloomberg
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  The feud between American Airlines Group Inc and Qatar Airways Ltd keeps escalating.

  First, American scoffed at the Middle East airline’s interest in buying as much as 10 percent of the US company.

  That prompted Qatar Airways chief executive officer Akbar al-Baker to say that American Airlines chief executive officer Doug Parker was “frightened” by the proposed investment.

  

  Qatar Airways chief executive officer Akbar al-Baker signs a wall bearing a portrait of Qatari Emir Sheikh Tamim bin Hamad Al Thani in Doha yesterday.

  Photo: AFP

  Then al-Baker found himself in the hot seat this week after disparaging US flight attendants as “grandmothers” and boasting that his own cabin crew personnel had an average age of 26.

  He apologized on Wednesday after a rebuke by labor unions and American Airlines, which called the remarks “both sexist and ageist.”

  The latest casualty is a marketing deal between the two companies, known as a codeshare, which American Airlines now says it will end because of a longstanding dispute over whether Persian Gulf carriers use government subsidies to compete unfairly.

  The US company privately notified Qatar Airways of the decision on June 29 — a week after disclosing that the Middle East airline’s overture to potentially become one of American Airline’s largest shareholders.

  “They definitely are trying to send a message to Qatar that they don’t want Qatar involved in American,” Hamlin Transportation Consulting president George Hamlin said.

  American Airlines said it would also end a marketing agreement with Etihad Airways PJSC.

  The end of the codeshare deals will not have a significant financial effect, American Airlines said in an e-mailed statement.

  “The codesharing relationships between American and these carriers no longer make sense to us,” the Fort Worth, Texas-based company said.

  The decision “is an extension of our stance against illegal subsidies these carriers receive from their governments,” it said.

  Etihad said it was “disappointed” with American Airline’s exit from the codeshare pact and rejected allegations it violated any air-transportation agreements.

  “We view the decision by American Airlines as being anti-competitive and anti-consumer,” Abu Dhabi-based Etihad said in an e-mailed statement. “This action will reduce choices for consumers and may result in higher fares for travelers to and from the United States.”

  Qatar Airways did not immediately respond to requests for comment.

  Qatar Airways on Monday withdrew and refiled a regulatory document about its plan to acquire American Airlines shares, the US carrier said on Wednesday.

  The proposed investment would not change American Airline’s “board, governance, management or strategic direction,” it said.

  “American Airlines continues to believe that the [US] president and his administration will stand up to foreign governments to end massive carrier subsidies that threaten the US aviation industry and that threatens American jobs,” the company said in a filing.

  American Airlines has led calls from US carriers for talks on whether government subsidies have enabled the three biggest Persian Gulf operators — Qatar Airways, Etihad and Emirates — to become global players.

  The Middle East majors say they have benefited from no more than seed capital many years ago and have become dominant thanks to a strategy of exploiting the Gulf’s position at a natural global crossroads to carve off a significant share of the most lucrative long-haul transfer traffic.

  The Persian Gulf airlines are also known for quality:

  Qatar Airways reclaimed the No. 1 spot in this year’s Skytrax awards, a coveted list of the leading 100 airlines. No US companies ranked in the Top 20.

  Hours before American Airlines announced the end of the codeshare deals, al-Baker apologized “unreservedly” for his unflattering description of US flight attendants.

  The Qatar Airways executive said his remarks were made at “a time of strong rivalry” with the US airlines.

  “Cabin crew are the public face of all airlines and I greatly respect their hard work and professionalism,” he said in an e-mailed statement. “They play a huge role in the safety and comfort of passengers, irrespective of their age or gender or familial status.”

  He also wrote an apology to Sara Nelson, president of the Association of Flight Attendants-CWA, which represents 50,000 workers at 20 US airlines.

  While accepting his apology, Nelson responded that al-Baker’s “offensive comments and the subsidies your airline receives perhaps indicate a belief that you can operate outside of rules and norms.”

  Qatar Airways and American Airlines are partners in the Oneworld global alliance and each counts British Airways as its closest global partner.

  Qatar Airways owns a 20 percent stake in British Airways parent IAG SA, but the Middle East company’s planned investment in American Airlines still came as a surprise given tensions between the two.

  The purchase of a major stake in American Airlines would mark a fourth foray into overseas ownership for Qatar Airways following its IAG deal; the acquisition of a 10 percent holding in Latam Airlines Group SA, the biggest South American carrier; and a planned 49 percent stake in minor Italian operator Meridiana SpA.
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