The Deck is Stacked

The nations of Qatar and the United Arab Emirates (UAE) are funneling billions of dollars in government subsidies to their state-owned airlines, distorting the international aviation market and undermining fair competition.

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Massive Subsidies Are Distorting the International Aviation Market

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

This subsidized support includes interest-free government “loans” with no repayment obligation, government grants and capital injections, free land, airport fee exemptions and more.

These subsidies are a clear violation of Open Skies policy, which is based on the principle of fair competition in a marketplace free of government distortion. $52 billion in subsidies and unfair benefits is the very definition of government distortion.

Qatar and the UAE Are Exploiting the Open Skies Framework to Build Their National Economies

The systematic subsidization of Qatar, Etihad and Emirates is part of a closely managed effort by the governments of Qatar and the UAE to direct the flow of international traffic through their own hubs and grow their economies.

Qatar, Etihad and Emirates operate as arms of the state carrying out the will of their respective governments – not as independent companies.

These Unfair Practices Put the U.S. Economy and U.S. Jobs at Risk

The massive government subsidies provided to Qatar, Etihad and Emirates are not only a clear violation of Open Skies policy, but they also pose a direct threat to the U.S. airline industry and thousands of American jobs. These state-owned carriers are using their huge, artificial advantage to rapidly expand their fleets and take over international routes, unfairly capturing U.S. airline market share and shifting U.S. aviation jobs overseas.

Comparison of U.S. Jobs (Airline Direct, Indirect and Induced) per Widebody Daily Roundtrip Frequency to/from the United States

*Using Oxford (2011) Multipliers
Notes: Delta figures assume daily frequency require two Boeing 777s staffed at Delta staffing ratios.
Sources: Analysis of U.S. DOT DB1B, U.S. DOT T100 and Delta Air Lines data; “The Economic Impact of Emirates Airline Flights on Greater Vienna/Austria,” Commissioned by Emirates, 2011; “Economic
Benefits from Air Transportation in the US,” Oxford Economics, 2011.

Bottom Line

A strong U.S. airline industry supports a strong U.S. economy. Qatar, Etihad and Emirates’ unfair, anti-competitive practices directly threaten the more than 10 million jobs and $1.5 trillion in nationwide economic activity supported by U.S. airlines.

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