July 13, 2017

American Airlines cancels codeshare agreement with Qatar Airways and Etihad

As a continuation of the discord between America’s big three carriers – American Airlines, Delta Air Lines and United Airlines – and Qatar Airways, Etihad and Emirates Airline, collectively known as ME3, American Airlines has issued notice to Qatar Airways and Etihad that it intends to stop their codeshare agreement. Notice was officially served on June 29, exactly one week before Akbar Al-Baker, Qatar Airways CEO, made widely-condemned insulting statements about U.S. airlines and flight attendants.
The discord relates to what the American carriers see as a flagrant breach of regulations surrounding the Open Skies agreement which has allowed the Gulf carriers to expand into the American market, and dates back to March 2015 when the US carriers alleged that ME3 — all state-controlled — had benefited from US$42bn of hidden aid during the past decade that distorted competition and thus enabled them to offer fares between the Middle East and the USA that U.S. carriers could not compete with. ME3 have vehemently denied being in receipt of these subsidies.
Additionally, American Airlines claimed that Qatar Airways had withdrawn an anti-trust submission to US regulator, the Federal Trade Commission (FTC), requesting permission to buy a stake in American Airlines. Qatar submitted a new notification to the FTC on July 10. They were originally looking to acquire a 10 percent stake in American Airlines, though last week Akbar al-Baker said last week that the airline would continue with its plans to buy up to a 4.75 percent stake in American, despite opposition from the US carrier.
The code shares termination will come into effect on March 25, 2018, according to a notification sent on Monday to American Airlines’ reservations agents.

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