Partnership for Open & Fair Skies Releases Further Evidence of Gulf Carrier Subsidies

The Partnership for Open & Fair Skies today released a massive cache of Gulf carrier financial documents obtained during a global two-year investigation into the multi-billion dollar subsidies provided by Qatar and the United Arab Emirates (UAE) to Qatar Airways, Etihad Airways and Emirates. Although this voluminous record offers clear evidence of those state-owned carriers’ violations of Open Skies policy, all three airlines have strongly resisted calls to provide a full accounting of their subsidization. In light of Qatar and Etihad’s continued refusal to publicly release their financial statements and Emirates’ limited release of financial information, the Partnership also called on the Gulf airlines to open their books. The documents are available here.

“With the U.S. government now investigating the Gulf carriers’ massive subsidies, Qatar Airways, Etihad Airways and Emirates must open their books and offer the same level of financial transparency that U.S. airlines provide,” said Jill Zuckman, chief spokesman for the Partnership for Open & Fair Skies.

Due to the Gulf carriers’ lack of financial transparency, American Airlines, Delta Air Lines and United Airlines undertook an extensive search around the world for information about those airlines’ state subsidies and other unfair trade practices. During the course of this unprecedented investigation, the U.S. airlines obtained hundreds of pages of financial statements, charter documents and other records from corporate registries in various countries where the Gulf carriers have local operations.

The worldwide search spanned nearly 30 jurisdictions from Africa to Asia to Australia and yielded key sources of information about the Gulf carriers’ finances from Singapore, Australia, India, Belgium, Ireland, Malta and the United Kingdom.

Despite the U.S. airlines’ exhaustive efforts, the Gulf carriers’ pervasive lack of transparency, as well as the interlocking relationships among the airlines, their suppliers, their hub airports and their government owners, has made it impossible to document the full extent of the subsidies. It is clear, however, that the $42 billion that the U.S. airlines were able to document understates the true numbers.

“The information in the financial records already in the possession of the U.S. government provide indisputable proof that Qatar and the UAE are funneling massive amounts of money into their state-owned airlines in a calculated effort to undermine Open Skies policy and any semblance of fair competition,” said Zuckman. “We believe that the $42 billion in subsidies and other unfair state benefits that our investigation uncovered is just the tip of the iceberg.”

The financial records released today form the basis for the Partnership’s white paper, Restoring Open Skies: The Need to Address Subsidized Competition from State-Owned Airlines in Qatar and the UAE. The $42 billion in subsidies and other unfair government benefits documented in the report do not include subsidies received prior to 2004, massive purchases of goods and services from affiliated government-owned entities at not-at-arm’s-length prices, subsidized airport infrastructure and services, exemptions from corporate taxes and other taxes and duties, exemptions from competition laws, and more.