- Air Italy is a small Italian airline, but it’s playing a central role in a feud between America’s three largest air carriers and their rivals from the Persian Gulf.
- American, Delta, and United have long accused Emirates, Etihad, and Qatar Airways of unfairly benefiting from as much as $US50 billion in government subsidies.
- In January 2018, the Qatari government agreed to not launch flights from outside the Persian Gulf to the US.
- Weeks after that agreement, Air Italy, with financial backing from Qatar Airways, announced new routes to the US.
- “That didn’t seem within the spirit of the agreement; it seems like an absolute violation of the intent of the agreement,” the American Airlines CEO Doug Parker said.
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Air Italy is a small Italian airline with a fleet of 13 planes, but it’s playing a central role in a feud between some of the world’s great aviation powers.
For much of the past decade, America’s three largest airlines (US3) – American, Delta, and United – have been embroiled in a heated feud with their rivals from the Persian Gulf (ME3) –Emirates, Etihad, and Qatar Airways.
The US3 have long accused the ME3 of tilting the playing field in their favour by using more than $US50 billion in government subsidies to fuel their international expansions. As a result, the US3 alleges that the Middle Eastern carriers violated the Open Skies agreements that govern air travel between the US and the United Arab Emirates and Qatar.
Parker added, “That’s an enormous threat to commercial aviation and the United States. And therefore we’re really concerned about it, and we’ve expressed that for quite some time now.”
In January 2018, the Trump administration brokered a deal with the Qatari government in which Qatar’s airlines would release more detailed financial reports. A side-letter deal between the two parties also included an agreement that Qatari airlines would not launch new flight routes into the US from outside the Persian Gulf. The UAE agreed to a similar deal in May.
The agreements seemingly put the feud to rest. However, the truce wouldn’t last very long.
A few weeks after the Qatari government’s deal with the Trump administration was announced, Italy’s Meridiana airline was rebranded as Air Italy and announced new flights to the US. Qatar Airways acquired a 49% stake in the financially challenged carrier several months earlier.
Air Italy’s entire Airbus A330 fleet, the aircraft used for its US flights, had previously served with the Qatar Airways. One of Air Italy’s Boeing 737 Max airliners is leased directly from Qatar Airways.
“That didn’t seem within the spirit of the agreement; it seems like an absolute violation of the intent of the agreement,” the American Airlines CEO added. “Yeah, we don’t think that’s right.”
In December, Delta Air Lines CEO Ed Bastian published a scathing op-ed echoing Parker’s sentiments.
Air Italy issued a statement in response to these allegations:
Air Italy is an Italian-registered and Italy-based airline. We are 56 years old (we previously were known as Meridiana), and we have served the United States for many years. Our shareholders are Alisarda, which holds 51% of our shares, and Qatar Airways, with a 49% shareholding. Our ownership structure has been reviewed and approved by the Italian Civil Aviation Authority, ENAC, and by the European Commission.
As of today, we have a fleet of 13 aircraft, five of which are capable of operating long-haul service. While we pride ourselves on our flair and world-class service, we are puzzled (but slightly flattered) that the three very largest US carriers – which between themselves operate a fleet of more 2,500 aircraft – claim to be threatened by us.
So where does this dispute end? According to Parker, it ends with the Qatar Airways-backed Air Italy ceasing its US operations.
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