New Report: Majority of Gulf Carrier Routes to U.S. Lose Money

Washington, D.C. (November 19, 2015) – The majority of flights to the United States by Emirates, Etihad Airways and Qatar Airways lose money, according to a new report by an independent aviation economics firm.

The findings, by GRA, Incorporated, show that of the 23 routes operated by the Gulf carriers to the United States in 2014, 19 have lost money. The combined losses for the three carriers on these routes average -14.4 percent, with more than half of the routes showing losses of more than 20 percent.

In the report, titled Gulf Carrier Profitability on U.S. Routes, the authors conclude that “our findings indicate that the three carriers have over-expanded in U.S. markets beyond levels one could justify from the operating results. No individual Gulf carrier shows profits on more than 30 percent of the markets it operates to the U.S. The loss margins in many markets would not be sustainable for a private company, nor would a private company be planning to expand in this theater.”

“Without the blank checks from their governments, the Gulf carriers would be grounded,” said Jill Zuckman, chief spokesperson for the Partnership for Open & Fair Skies. “Meanwhile, the U.S. carriers are being forced off routes because of the Gulf carriers’ unfair competitive edge. This new information shows that it’s time for the Obama administration to enforce our Open Skies agreements with the UAE and Qatar.”

Last month, Delta announced plans to cancel nonstop service between Atlanta and Dubai noting the decision “comes amid overcapacity on U.S. routes to the Middle East operated by government-owned and subsidized airlines.” When U.S. carriers are forced off of routes, it puts American jobs at risk. For every route lost to a Gulf carrier, more than 1,500 American aviation jobs are lost.

The Partnership, along with over 260 members of the U.S. House of Representatives, 22 U.S. senators, the U.S. Conference of Mayors, representing over 1,400 mayors of major U.S. cities, and dozens of business, trade and economic groups around the country, is asking the U.S. government to request consultations with the UAE and Qatar and to request an immediate freeze on the introduction of new passenger service by the Gulf carriers during these consultations.

The full report is available here.