DOJ Sides with Flyers in U.S.-Gulf Carrier Battle

If the Justice Department has its way, an international air battle royal may be coming to a head, with American travelers the winners.

An international air battle royal may be coming to a head, with American travelers emerging the winners.

If you haven’t been following the dispute between the Big Three U.S. airlines (American, Delta, United) and the three Gulf carriers (Etihad, Emirates, Qatar), it boils down to charges that the Gulf carriers are government-subsidized, and therefore enjoy an unfair competitive advantage and should be prohibited from expanding their U.S. operations. The Gulf carriers deny that they benefit from government funding, and countercharge that the U.S. airline complainants are themselves receiving government support in the form of tax breaks and bankruptcy bailouts.

It’s a battle that’s being fought mostly out of public view, in industry speeches and P.R. outreach to lawmakers, regulators, and airline analysts and commentators (I’ve been receiving regular email entreaties from both sides for months).

The latest in this mostly behind-the-scenes dustup: Reuters is reporting that the Department of Justice has made its opinion known to the departments of transportation, state, and commerce, all of which are reviewing the matter. According to an unnamed source quoted in the article, “In the department’s view, U.S. officials must evaluate the broader public interest at stake, not merely the financial impact on U.S. aviation.”

In other words, even if it can be shown that the Gulf airlines benefit from financial support from their respective governments, the economic benefits of having those airlines serving U.S. destinations — more competition, more consumer choice, more jobs for U.S. workers — must be considered as well.

While the DOJ’s recommendation has no formal bearing on the dispute’s resolution, its opinion will certainly carry considerable weight with the departments that will ultimately rule on the matter. And the DOJ’s call to focus on competition and choice significantly increases the odds that any final decision will favor consumers’ best interests over the airlines’ self-serving accusations.

And that means a decision to overrule the U.S. airlines’ complaints.

Reader Reality Check

Should the Gulf carriers’ U.S. flights be curtailed? Or are the U.S. carriers a bunch of protectionist whiners?

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By Tim Winship

After 20 years working in the travel industry, and 15 years writing about it, Tim Winship knows a thing or two about travel. Follow him on Twitter @twinship.