They are subsidized.
These airlines are owned by their governments in Qatar and the United Arab Emirates. And their governments give them money. A lot of it. An investigation by Delta, United and American airlines uncovered more than $40 billion in government subsidies that had been paid to the three Gulf airlines. And those subsidies are growing every day. The airlines aren’t operated as businesses – they are essentially economic development arms of their governments. That means they have a big financial advantage over U.S. airlines. It also means they are violating the Open Skies agreements between the United States and Qatar and the UAE, which require a level playing field free of government subsidy.
They are secretive.
The Gulf carriers all deny they are subsidized. But that claim has always been difficult to check, because they refuse to disclose financial reports. All of their finances and accounting practices are shrouded in secret. It took a team of investigators and forensic accountants two years, combing through obscure sources across the globe, to compile enough financial documents to finally shed some light on the massive subsidies the Gulf governments are giving to their airlines.
An investigation by Delta, United and American airlines uncovered more than $40 billion in government subsidies that had been paid to the three Gulf airlines.
They are growing fast.
Fueled by $42 million in subsidies, Qatar, Etihad and Emirates are in the middle of a massive, unprecedented expansion into global markets. Since 2000, they have increased their capacity by 1,200 percent. But that’s just the start – huge widebody aircraft orders mean the Gulf airlines will have more international capacity than Delta, United and American combined by 2020. Because they are subsidized, they can grow even if flights lose money. A recent report in the Fort Worth Star-Telegram estimated that Emirates’ DFW-Dubai flight was averaging more than 60 percent empty, but the airline is showing no signs it will end the service. DFW officials noted that the excess Gulf capacity was hurting demand on flights to Europe, because passengers were using the Gulf airlines to connect to India and Africa instead of connecting through Europe.
They treat their employees poorly.
Human rights groups have warned about the exploitative labor practices of the Gulf states, which include the employment policies of their airlines. The vast majority of the Gulf airlines employees are foreign, and their lives are tightly controlled. According to a recent article in the Washington Post, at Qatar Airways, female flight attendants can only be hired if they are single. They must remain single for five years, and must get the airline’s permission if they want to marry. They need the company’s permission to move, change jobs, or leave the country. “Employment relations at Qatar Airways is an open wound in the face of the global aviation industry,” Paddy Crumlin, head of international transport union ITF Global, told Swedish newspaper Expressen. “Their treatment of employees is appalling.”
They are targeting the United States.
The international capacity of the Gulf airlines far exceeds the demand for travel to and from their home countries. With hundreds of widebody aircraft on order, these airlines are increasingly targeting the U.S., including key international routes that don’t even touch their home countries. Gulf airline capacity to the U.S. has increased by more than 500 percent 2007 and is expected to grow exponentially in the future.
Want to learn more? Visit OpenAndFairSkies.com to get informed and take action.