US Open Skies treaties with other countries do not forbid airline subsidies, which is a good thing for US airlines who have received tremendous subsidies.
Those treaties do prohibit dumping of capacity, but US airlines have lobbied for a very narrow definition of dumping because they have often been accused of it themselves. If an airline charges prices which, if the planes fill up completely, cover their costs then it isn’t dumping.
United, American, and Delta have had absolutely no legitimate legal case as they’ve attempted to get government protection from competition against Emirates, Etihad, and Qatar. Their lobby shop even fabricated evidence in its white paper on Gulf airline subsidies. The Obama administration refused to act on their request to pick the pockets of American consumers through fewer flight options and higher prices.
Sure American Airlines received federally subsidized loans for its first big aircraft order, just like Delta partner Saudia received planes from the government. No complaints are made. Etihad stopped subsidizing Alitalia, so the Italian government stepped in, but Alitalia shares revenue across the Atlantic with Delta so no complaints are made.
Now here’s another piece of evidence that the US airlines don’t have an issue with subsidies — it isn’t an issue of principle, it’s about looking for a lever to get the government to benefit their business. United partner South African Airways just got a new government infusion of cash.
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Sure United and American don’t fly to South Africa. But US airlines really don’t compete directly with Etihad or Qatar, whose US flights mostly carry passengers to India (including many secondary cities in India), Pakistan, and the surrounding region. South African’s US flights are limited, but so are Etihad’s. Emirates does operate two US-Europe routes.
Of course complaints about government subsidies to South African Airways aren’t going to go very far with the U.S. government — since South Africa is giving its airline about half a billion dollars to pay back Citibank. And if there’s any industry as cronyist as the big US airlines it’s the big banks.