Foreign governments distort free and fair markets by providing massive subsidies to their state-owned airlines as an effort to use government-sponsored aviation as instruments of economic development. Competition with state-owned airlines unconstrained by marketplace limitations of profit and loss and supply and demand can never be open or fair.
Such is the case with the more than $50 billion in government subsidies that have flowed from the United Arab Emirates (UAE) and Qatar to Emirates, Etihad, and Qatar Airways since 2004.
About the policy
Since 2004, the governments of Qatar and the UAE have provided $52 billion in subsidies and other unfair benefits to Qatar Airways, Etihad Airways and Emirates. The $52 billion is not speculative; it is based on numbers that the three airlines have reported in financial statements that were uncovered as part of a global forensic financial investigation. The figure likely underreports the total amount of government subsidy that the airlines receive. The $52 billion includes interest-free government loans, direct grants and capital injections, free land and infrastructure, airport fee exemptions and more.
Over time, these violations provided the Middle-Eastern airlines unfair advantages allowing them to take over international routes, steal market share and eliminate American jobs.
How Middle-Eastern Carriers Hurt America’s WORKERS and the U.S. Airline Industry
There are over 1,500 good paying American jobs lost for each discontinued or forgone international flight.
How Middle-Eastern Carriers Hurt America’s CONSUMERS
Impacted passengers have flown an extra 2.3 billion miles because of lost non-stop flights and inefficient/longer routings.
3.4 million more passengers projected to be impacted over the next 5 years
How Middle-Eastern Carriers Hurt America’s COMMUNITIES
U.S. airlines connect our small towns to the world. They connect families together, provide greater access to medical care, education and commerce while connecting business to opportunity, culture to culture and idea to innovator.
If the Middle Eastern carriers continue to unfairly compete because of the massive subsidies received from their governments, the U.S. airline industry’s future is in jeopardy and the services enjoyed by the 282 small communities are at risk.
Working with our partners—including American Airlines, United Airlines and the Air Line Pilots Association, among others—Delta encouraged the U.S. Government to enforce these aviation trade agreements and level the playing field for America’s aviation industry and the millions of jobs it supports, as well as foster competition that, ultimately, benefits the American public.
We support recent agreements that compel the UAE and Qatar to make a series of changes in the way they finance and operate their state-owned enterprises, including an end to government subsidies. We were pleased that both nations acknowledged that government subsidies harm competition. It was a significant moment in a years-long pursuit of a level playing field.
Everyone should play by the same rules, and our trade agreements should be enforced. This is fundamental to the long-term health of the U.S. airline industry. We will continue to encourage the government to ensure that remains the case.