Delta planning new international routes now that Middle East airline dispute is resolved, CEO says

Key Points
  • Delta Air Lines and other large U.S. airlines alleged the big three Gulf carriers received unfair subsidies.
  • U.S. and the United Arab Emirates reached a deal to require two local carriers to open their books.
  • Qatar and the U.S. reached a similar deal earlier this year.
Ed Bastian, CEO of Delta
Nicky Loh | Bloomberg | Getty Images

Delta Air Lines plans to announce new international routes in the coming weeks after U.S. and three Gulf carriers resolved a more than three-year-old dispute over unfair competition, the airline's CEO said Monday.

Delta and competitors American Airlines and United Airlines have complained for years about the expansion of three Persian Gulf carriers — Qatar Airways, Abu Dhabi-based Etihad Airways and Dubai-based Emirates Airline, saying they receive state subsidies that have created unfair competition for the U.S. airlines.

In a January 2015 paper, the Partnership for Open and Fair Skies, a lobbying group representing the three U.S. airlines, said the three Middle Eastern carriers have received more than $40 billion in government subsidies and other "unfair advantages in the last decade alone." The Persian Gulf airlines have denied those allegations.

But on Friday, the U.S. and the United Arab Emirates, home to two of the three carriers mentioned in the dispute, reached a deal in which Etihad and Emirates would open up their books, providing financial statements that are up to international accounting standards. Qatar reached a similar agreement with the U.S. earlier this year.

Delta's CEO Ed Bastian said the deal would allow Delta to add new destinations.

"We've been hurt in India," he said, although he did not specify which cities Delta is planning to add. He said routes currently served by those three Gulf carriers is "ripe for our opportunity to fly."

Delta called off its Atlanta-Dubai flight in 2015, saying it was because of unfair competition from the Gulf carriers. United is the only U.S. carrier offering nonstop service to India.

Emirates, which has added flights to the U.S. in recent years, has also introduced what is known as "fifth freedom" flights, flying to or from a destination other than the carrier's home country, with service to Milan and Athens from the New York City area.

The United Arab Emirates said in a statement that the agreement with the U.S. meant "business as usual by validating all of the rights and benefits — including 'Fifth Freedom' services."

The lobbying group representing the big three U.S. airlines, however, said the United Arab Emirates had agreed that it wouldn't allow more of those flights.