European Union urged to take action against state subsides to Gulf airlines

BRUSSELS – France and Germany are leading a call to ensure EU airlines can fairly compete with those from the Gulf region, which are accused of receiving major state backing.

The French and German transport ministers said in a statement Friday that they want their EU partners and the EU executive Commission “to adopt a common strategy to bring an end to these practices.” Companies from the Gulf like Emirates, Etihad and Qatar Airways have surged while many EU airlines have struggled.

The three largest U.S. airlines have claimed that the three Gulf carriers have received more than $40 billion in subsidies from their governments since 2004. They said that makes competition with them unfair because their costs are artificially low.

Austria, Belgium, the Netherlands and Sweden backed the Franco-German call at a meeting of EU transport ministers in Brussels Friday, the Franco-German statement said.

France and Germany said that Gulf carriers benefit from “major subventions and public guarantees,” and that landing rights in Europe should only be granted to airlines in exchange for fair trade controls on the way companies operate.

They also want EU legislation revised so that fair competition can be legally enforced in the air transport sector.

The CEOs of American, United and Delta want U.S. federal officials to renegotiate or kill treaties that have allowed Gulf airlines to increase flights to the U.S. They say that unless the treaties are changed, they will be forced to cut back or drop international routes.

State-owned Qatar Airways, Emirates and Etihad Airways say that the U.S. airlines are only blocking competition and want to protect the high fares they charge on international flights.

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