ATW Editor's Blog

EC’s clear message to the US: Don’t mess with Air Italy

by Karen Walker
Jun 27, 2019

EC Mobility and Transport director general Henrik Hololei’s letter to US State Department under-secretary Manisha Singh couldn’t be clearer: Hands off Air Italy or risk US airlines losing the many benefits and privileges they enjoy as part of the US-EU Open Skies agreement.

By targeting Milan-based Air Italy, American Airlines, Delta Air Lines and United Airlines were always playing with fire. Their argument is that Air Italy, in which Qatar Airways has a 49% stake (totally legitimate), is really an extension of Qatar Airways, so its flights to the US breach a gentleman’s agreement reached last year when Qatar said the Doha-based airline had no plans to operate fifth freedom flights to the US.

This is all nonsense. Air Italy is an EU-based carrier and, as such, fully entitled to fly to the US under US-EU Open Skies, just as American, Delta and United are completely free to fly to wherever they wish in the EU.  Even if there were some basis to their argument, it would follow that the US should also target British Airways’ flights to the US because Qatar Airways has a 20% stake in BA’s parent, IAG. But you won’t hear American describe BA flights as fifth freedoms; if it did, American would have to label some of its own flights to Europe as fifth freedoms because many of them are operated by its joint venture partner, BA.

But now Hololei has made clear what the three US majors should have seen for themselves and what concerned many others in the US aviation industry saw: If the US meddles with Air Italy, it will be regarded by the EC as constituting a “clear and serious violation” of the US-EU Open Skies agreement, Hololei says.

And if the EC is forced to retaliate, the biggest losers would be the US majors and their European airline partners with whom their antitrust immunized partnerships dominate the all-important transatlantic market.

There’s a lot of smart people at American, Delta and United; US-EU Open Skies was probably the best government policy for their businesses after US deregulation. They need to stop shooting themselves in the foot.

Karen Walker karen.walker@informa.com

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