Trump administration to discuss airline subsidies with UAE, Qatar, but stops short of freezing flights

Key Points
  • Several U.S. airline executives met with Trump administration officials Tuesday.
  • U.S. airlines allege Gulf carriers receive illegal subsidies from their governments.
  • State Department officials have planned talks with delegations from U.A.E. and Qatar.
Businessman walk past an Emirates Airbus A380 during the Dubai Airshow on November 18, 2013 in Dubai, United Arab Emirates.
Christopher Furlong | Getty Images

Trump administration officials on Tuesday met with executives from U.S. airlines, their employees' labor unions, and other industry representatives to discuss a course of action over a bitter dispute with their Persian Gulf airline rivals.

The plan, at least so far, is more talks.

The nearly three-year-old dispute is based on allegations from three large U.S. airlines – Delta, United and American – that three of their Middle Eastern competitors receive illegal subsidies from their governments, making an uneven playing field for other airlines.

State Department officials met with representatives of the airlines as well as groups that oppose penalizing the Middle Eastern carriers, according to sources briefed with the meeting.

The Trump administration plans on meeting with officials from Qatar as early as this week and is planning to meet with officials from the United Arab Emirates to seek financial transparency, and using commercial loan terms, said a person briefed on the matter.

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The State Department didn't respond to a request for comment.

One issue that Trump administration officials may discuss with their Gulf counterparts, according to a person familiar with the talks, is that of so-called "Fifth Freedom" rights. These rights allow airlines to fly between two countries of which neither is their home country. Emirates operates flights between New York and Milan, as well as from Newark and Athens.

"We applaud the Trump administration for taking action to level the playing field with the Gulf carriers and their massive government subsidies," said Jill Zuckman, spokeswoman for the Partnership for the Open and Fair Skies, which represents the big three U.S. airlines in the dispute. "Their activities are harming American jobs and the U.S. aviation industry, and we appreciate that the administration is acting to resolve these issues with the governments of the UAE and Qatar."

But groups that oppose action against these Persian Gulf carriers also declared victory after the meeting.

"The legacy carriers are still unable to show harm, still cannot point to a specific violation of the agreements," said U.S. Airlines for Open Skies, whose members include JetBlue and FedEx. "We are confident further investigation by the Trump administration will show the claims for what they are: a political ploy to protect themselves from competition and limit choice for U.S. travelers."

People familiar with the talks said the government did not decide to freeze Gulf carriers' routes, however.

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