The State Department will require Qatar Airways to disclose more about its finances, a move that comes after years of complaints from Delta and other major U.S. carriers that the Middle Eastern airline operates with an unfair advantage.
Delta, American and United airlines had raised concerns about what they call unfair subsidies from Qatar’s government to its state-run airline.
That, the big three U.S. airlines have argued, creates an uneven playing field that has allowed Qatar Airways, as well as Emirates and Etihad Airways in the United Arab Emirates, to launch routes to the United States and cut into the lucrative market for international flights.
In an interview with The Atlanta Journal-Constitution, Delta CEO Ed Bastian called the agreement reached between the State Department and Qatar “a step in the right direction. They’ve now agreed to provide full transparency around any subsidies that may exist,” which Delta plans to monitor.
Delta had encouraged its employees to send messages to the White House to push for action on the issue. “There was no question that this would not have reached today’s conclusion were it not for the Delta people and having made certain that their voices were louder than the Middle Eastern money,” Bastian said.
Qatar Airways in 2016 launched flights between Doha and Atlanta, igniting an already heated feud between Delta’s then-CEO Richard Anderson and Qatar Airways CEO Akbar Al Baker, both vocal and pugnacious leaders.
This week’s deal falls short of what the the three U.S. airlines had originally sought — a renegotiation of the U.S.-Qatar “Open Skies” air service treaty. The State Department said it is “maintaining the Open Skies framework, which continues to yield real benefits for U.S. airlines, airports, labor, the travel industry and consumers, among others.”
The agreement also doesn’t stop Qatar from launching more flights from its Doha hub to the United States.
But on Tuesday, Bastian said that was not Delta’s chief concern, because of the high volume of flights the Middle Eastern carriers already operate to the United States. “I’m not sure there’s much economic gain to be achieved,” he said. “I think they’ve already trashed the market pretty heavily.”
Bastian said the agreement does address one of Delta’s key concerns. Qatar said it has no plans to launch passenger flights from outside Qatar to the United States, or so-called “fifth freedom” passenger flights. “That [is what] we were most concerned with, and I do think this agreement will not allow that to happen now,” Bastian said. “They gave their word.”
The State Department said the “understandings” reached with Qatar on Monday “represent a set of important, high-level political commitments.”
Qatar Airways will be required to issue public annual reports with financial statements audited in compliance with internationally recognized accounting standards, publicly disclose “significant new transactions with state-owned enterprises” and “take steps to ensure such transactions are based on commercial terms,” according to the State Department. U.S. airlines will be held to the same standards.
Another meeting will be held in a year “to discuss progress.” The State Department said it will also pursue discussions with the United Arab Emirates.