Later today U.S. Secretary of State Rex Tillerson will announce a sweeping deal that will put to rest the dispute between U.S. carriers and Qatar Airways. But who is the real winner here?
Qatar Airways will agree not to run indirect flights to the USA (Fifth Freedom flights) “for now” and will become more financially transparent. This greater transparency will include the use of internationally recognized accounting standards and the publishing of audit results and annual reports.
That’s it. An agreement to avoid adding Fifth Freedom flights…for now…and financial transparency that Qatar will still control.
Listening to Peter Carter, Delta’s chief legal officer, you’d be forgiven for thinking Delta just won World War III:
This would be a landmark milestone for the American airline industry that will protect our workers and ensure that our foreign competitors play by the rules and do not undermine our international agreements. We all support the administration as it holds their feet to the fire to ensure they live up to their commitments.
This from the airline that is buying Airbus instead of Boeing jets…
View from the Wing points out a most startling admission from Delta CEO Ed Bastian in Business Insider—
We can’t put our competition solely in the hands of Washington, we have to compete in the marketplace…That’s why we are continuing to invest in our international fleet with the new Airbus A350s while working hard with our partners to invest and to improve the quality of service together.
Did you catch that? Bastian is acknowledging that improved service comes through competition. Thus, I think we can fairly extrapolate that had the U.S. government more aggressively protected Delta, we’d see service levels decline. And why not? Why would Delta need to compete if the market did not force it to?
CONCLUSION
Really, this news is about allowing Delta (and to a lesser degree United and American) to save face. Their jingoistic arguments against Gulf Carriers do not hold up, but these token gestures by Qatar allow Bastion and company to declare victory.
Meanwhile, Qatar will continue to hold stakes in carriers including Aer Lingus, British Airways, Iberia, and Meridiana. The result is similar to any Fifth Freedom flying Qatar Airways did on its own: feeder flights for Qatar.
Did Delta really win this round? I’m not so sure.
The true winner here Saudi-led blockade of Qatar forcing them into a conciliatory position while Emirates will continue flooding the transatlantic market with 5th freedoms
there will come one day in which EK has more LHR slots than what they realistically could fill even through their super hub ….. at that point, they’ll come slaughter both BA/AA and DL/VS’s bread-n-butter LHR-JFK route.
I think the real winner here is Swiss airlines who canceled the Swiss first tickets and then got the blogger to pay cash for seats.
Very happy to see Delta achieved nothing through leading a canpaign that was based on rote nationalism, and at times seemed borderline racist.
Delta more than any of the other US carriers has been anti-competitive for years and ironically almost never buys US-made aircraft (as you point out). Their political position got so distasteful that I personally started consciously avoiding them.
I also hope AA feels as stupid as they look for allowing themselves to get dragged into this nonsensical fight that they had no reason to join (they benefitted massively in the India market from cooperating with QR and EY).
@ Kerry (John?)
“Achieved nothing”? Agreeing not to launch 5th Freedom flights and agreeing to play by a predetermined set of accounting rules is a lot more than “nothing.” The overall impact of this can and will be subject to debate, but it isn’t nothing. Words matter.
But of course, all that matters to good leftists like you is that you are angry, and you can dismiss anyone and anything that you disagree with by simply leveling a baseless charge of racism. Keep it up. It seems to be working out really well for you. Now, back to your safe space you go.
Haha Wes, you are right words do matter which is why I was accurate to describe public statements that implicitly linked middle-eastern carriers to terrorism without a shred of evidence presented as “borderline racist”.
It’s hilarious that you are labelling me a “leftist” for criticising Delta’s position here. They ran cheap, tawdry, jingoistic and yes, borderline racist public campaign to reduce competition (and therefore increase fares for American fliers) while simultaneously ordering no new aircraft from American manufacturers. Clearly, I am practically a communist for objecting to that.