U.S. Airlines say government subsidies give Gulf carriers an unfair advantage, while antitrust officials caution against making a decision that would limit choices or jack up prices for travelers.
For the better part of 2015, Middle Eastern carriers like Emirates, Etihad, and Qatar Airways have been looking to expand their service in the United States—much to the dismay of America’s three largest carriers.
This week, the U.S. Justice Department sided with the Middle Eastern airlines—or, more accurately, with the average flyer—when antitrust officials raised concerns that limiting flights from certain airlines would result in ever-increasing fares and fewer flight options for travelers.
Department of Justice officials don’t have a final say in the decision to give gulf carriers free reign, but its comment is certainly present a new obstacle for U.S. carriers.
Executives from Delta, American and United are rebelling against open-skies agreements, which for two decades have allowed carriers to launch international flights, fostering competition and lowering fares. Although legacy carriers traditionally backed these policies, they now argue government subsidies in the Gulf countries—totaling more than $42 billion—give the foreign airlines an unfair advantage. Middle Eastern carriers currently operate around 200 flights to 12 U.S. cities.