War rages between U.S and Arab World Airlines

Three of America’s top airlines — American Airlines, United Airlines and Delta Airlines — have launched a campaign to block the commercial services of Qatar Airways, Emirates Airlines  and Etihad Airways which provide direct flights to popular destinations in the gulf, such as Dubai. They complain the Arab airlines receive subsidies from their governments, but they are silent about subsidies Israel gives to its national airline, suggesting racism

By Ray Hanania

Most Americans are already familiar with the exorbitant costs they must pay for flights and the shoddy service they receive from the nation’s top airlines, United, Delta and American.

So it comes as no surprise that the same three U.S. commercial airline companies have launched a coordinated campaign to attack several Arab World commercial airlines that provide what customers have said is the best service to and from the Middle East, Qatar Airways, Emirates Airlines and Etihad Airways.

United Airlines, Delta Airlines, and American Airlines are behind a campaign to prevent the Arab airline companies from receiving subsidies from their governments.

The lead advocacy group promoting this issue is “Partnership for Open and Fair Skies” (POFS). POFS is coordinating the anti-Arab airline attacks with another group called “Americans for Fair Skies” (AFS) which is headed by a former Delta pilot, Lee Moak. Moak runs a Public Affairs, business and advocacy group based in Washington D.C., The Moak Group, which ties its services to “leadership training and structure gained through military experience”, according to its website.

Leaders of the American Arab community have charged that the campaign against Etihad Airways, Emirates Airlines and Qatar Airlines is discriminatory and racist because the same groups are silent about government subsidies that Israel gives to its national airlines, El Al.

In fact, many foreign airlines receive subsidies from their governments to operate flights around the world.

Memphis-based FedEX and other carriers have sided with the Gulf Airlines charging that POFS and other groups are engaged in “protectionism” and trying to restrict savings and services that would benefit Americans traveling to overseas groups.

In a comment filed with the U.S. Department of Transportation and the U.S. Department of State in June, FedEX stated, “FedEx is filing in this docket primarily to defend Open Skies, not the position of the Gulf Carriers. However, we are concerned that some of the arguments (and proposed ‘solutions’) against the Gulf Carriers could result in damage to FedEx, the U.S. all-cargo industry or U.S. interests writ broadly.”

FedEX is the largest U.S. airline presence in the Gulf and they believe the anti-Gulf lobbying campaign would undermine jobs they provide to American employees.

United Airlines, American Airlines and Delta Airlines have also received the support of Chicago Mayor Rahm Emanuel, one of the most anti-Arab mayors of any American city, outside of New York City. In his first month in office, Emanuel crippled the involvement of American Arabs in his government after American Arabs challenged his failure to serve in the U.S. Military while he volunteered and served in the Israeli military.

Since then, Emanuel refused to support the Arabesque Festival, which forced the festival to end in 2011. And, Emanuel has worked with non-Arab Muslims to build a false image of diversity. Most Arabs in America are Christian and the majority of Muslims in America are non-Arab.

Etihad Airways was welcomed to Chicago O’Hare International Airport in 2009 during a formal reception (covered by this reporter.)

Ironically, while United Airlines, Delta Airlines and American Airlines have targeted the commercial airline companies originating from Arab countries, they have been silent about similar government subsidies that are provided to other foreign-based airlines by their governments, such as the subsidy that the Government of Israel provides to  its national airlines, El Al.

Rather than criticize El Al and Israel over the issue of subsidies, American Airlines management cancelled their flights to Israel this past week. (Read the story.) Israelis quickly blamed the American Airlines decision, ironically, on the commercial airline’s ties to the “Muslim World” and the airline companies including Qatar Airlines and Royal Jordanian Airlines, which is not a target of the “foreign subsidy protests” from the two advocacy groups.

While the Gulf airlines do not discriminate against Jewish passengers who travel to the Middle East on their airlines, El Al discriminates against Christians and Muslims of Arab heritage who are U.S. Citizens, and also against non-Arab U.S. citizens who have criticized Israel’s foreign policies. The American Arab Anti-Discrimination Committee (ADC) has launched a campaign to document incidents involving U.S. Citizens who are discriminated against while boarding not only El Al Airlines but also other U.S. commercial flights to Israel. (Click here to get more information on the ADC Campaign.)

United, Delta and American have been sued by Americans or Arab and Muslim background who claimed they are the victims of discrimination by the airline employees. In one incident earlier this year, passengers on a Delta Airlines flight began berating an Arab-Muslim family with children because the wife was wearing a headscarf. The Delta Airlines employee also berated the Muslim family and ordered them to change seats threatening to kick them off the plane. (Click here for more background).

Etihad Airlines has denied the claims by the advocacy groups. None of the Arab Airlines have followed the strategy employed by United Airlines, Delta Airlines and American Airlines to hire a public affairs firm to respond to the discriminatory, anti-Arab campaign against the Arab airline carriers.

Here is the press release posted by POFS:

Newly Unearthed Etihad Documents Prove Extensive, Ongoing Subsidization Scheme

Etihad’s own financial statements show billions of government funding in 2014 in violation of Open Skies to prop up failing carrier

New documents discovered as part of an ongoing, worldwide investigation have provided damning evidence of additional, massive subsidies to Etihad Airways from the United Arab Emirates in violation of Open Skies.

The Etihad financial statements, which have never been disclosed to the U.S. government, are included in amajor legal submission that the Partnership for Open & Fair Skies filed with the U.S. Department of Transportation on Monday. The filing categorically disproves statements by Qatar Airways, Etihad Airways and Emirates to the U.S. government and demonstrates real harm to the U.S. carriers and American jobs.

On May 28, 2015, Etihad issued a press release claiming to have posted a net profit of $73 million in fiscal year 2014, “its strongest financial results to date,” but the company declined to release any financial statements or corroborating evidence.  Investigators working for the three U.S. carriers and several airline employee unions obtained a copy of the non-public statements in Hong Kong – and the contents make clear why Etihad is refusing to release them to the U.S. government.

The financial statements show that in 2014, as in every other year since 2007, Etihad received significant cash injections from the government of Abu Dhabi: $2.6 billion – a single year record, and over twice as much as the prior single year high of $1.25 billion in 2010.  The documents also indicate that the total government funding in 2014 was as high as $5 billion.

As in previous years, the financials show that Etihad’s status as a “going concern” was specifically tied to the “expected continued financial support from the Shareholder of the Company” (i.e., the government of Abu Dhabi).  Without the subsidies, Etihad would not be commercially viable.

“Etihad’s own financials prove that it is not a commercially viable enterprise and owes its continued existence to massive government subsidies from the United Arab Emirates,” said Jill Zuckman, chief spokesperson for the Partnership for Open & Fair Skies. “Do we really need further evidence that American aviation workers are being forced to compete against foreign treasuries in violation of Open Skies policy? In light of these revelations, the Obama administration must act now to stand up for American jobs.”

The documents further disclose that Etihad received another $543 million subsidized “loan” in 2014 and that an additional $40 million has been committed by the government. Etihad also obtained $1.85 billion in long-term, unsecured bank loans in 2014 “for financing its capital projects, contributions to investee companies and working capital requirements.” Although the statements do not identify the lenders, the notes to the statements strongly suggest that they are Abu Dhabi government-owned banks, which may explain the remarkable fact that$1.4 billion of the loans outstanding at the end of fiscal year 2014 are unsecured – an amazing feat for a company with a going concern opinion.

Additionally, Etihad had to resort to accounting gimmicks and trickery to portray itself as profitable. For example, for the second year in a row, Etihad recorded a $700 million gain by selling one of its own business units to itself. In 2014, Etihad sold its Global Cargo Management Company to itself and the year before it sold its frequent flyer program to itself in order to show profit. This single transaction made the difference between the “profit” that Etihad reported for 2014 and a loss in the hundreds of millions of dollars.

Researchers for the Partnership for Open & Fair Skies have scoured the globe for more than two years to compile forensic and archival evidence documenting more than $42 billion in unfair subsidies and benefits that the governments of UAE and Qatar have provided to state-owned airlines Qatar Airways, Etihad Airways and Emirates. During this time, researchers discovered financial documents in Australia, Singapore, Belgium andMalta in order to prove the magnitude of the subsidization that is upending the international aviation world.

The Partnership’s legal filing provides hard evidence to the U.S. government that the Gulf carriers’ claims are false and that those carriers have gone to great lengths to obfuscate the obvious – that massive government subsidies are propping up the three carriers. It also shows that the Gulf carriers’ entry into a U.S. city takes passengers away from domestic carriers, rather than adding to the total number of people flying to the United States as the Gulf carriers have tried to insist without substantiation.

Click to view Etihad’s 2014 Financial Statement and the Partnership’s rebuttal filing.

Background on Partnership for Open & Fair Skies

The Partnership for Open & Fair Skies is a coalition that includes American Airlines, Delta Air Lines and United Airlines, along with the Air Line Pilots Association, the Allied Pilots Association, the Southwest Airline Pilots’ Association, the Association of Professional Flight Attendants, the Association of Flight Attendants-CWA, the Communications Workers of America, and the Airline Division of the International Brotherhood of Teamsters. The Partnership presented a white paper, Restoring Open Skies: The Need to Address Subsidized Competition from State-Owned Airlines in Qatar and the UAE, to the U.S. government. The Partnership called on the Obama Administration to request consultations under the Open Skies agreements with Qatar and the United Arab Emirates to address the flow of subsidized capacity to the U.S., and to seek a freeze on new passenger service during the consultations.

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rayhanania

Op-Ed writer, author, radio host, podcaster at The Arab Daily News

Ray Hanania is an award-winning columnist, author & former Chicago City Hall reporter (1977-1992). A veteran who served during the Vietnam War and the recipient of four SPJ Peter Lisagor Awards for column writing, Hanania writes weekly opinion columns on mainstream American & Chicagoland topics for the Southwest News-Herald, Des Plaines Valley News, the Regional News, The Reporter Newspapers, and Suburban Chicagoland.  

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Hanania also writes about Middle East issues for the Arab News, and The Arab Daily News criticizing government policies in the Israeli-Palestinian conflict.

Hanania was named "Best Ethnic American Columnist" by the New America Media in November 2007, and is the 2009 recipient of the SPJ National Sigma Delta Chi Award for column writing.

Email Ray Hanania at rghanania@gmail.com.

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