“Last month, I spent two weeks teaching grad students about a variety of airline topics in Switzerland, Germany, and Sweden, and after nearly every lecture someone has asked about the impact of the three fast-growing Gulf mega-airlines, Emirates, Etihad Airways and Qatar Airways. A German woman noted that these carriers offer “insanely great service and ridiculously low fares,” then asked how this was possible and what effect these airlines would have on European airlines like Lufthansa. My response to these questions and others like them is that 1) this trio of airlines are all state-owned and enormously subsidized, therefore not bound by the commercial imperatives of real airlines like Swiss, Lufthansa, SAS; and 2) nearly all of their labor force is sourced from poor countries, and thus paid far less and treated inequitably compared to standards in Europe and North America. Because of the subsidies and unfair benefits they receive, the Gulf airlines pose an enormous threat to European and U.S. airlines, and the international aviation marketplace. As a result, the U.S. airlines have rightfully urged the Obama administration to intervene in this growing trade dispute.”

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