US airlines seen losing bid for Trump muscle on Qatar air feud

[DALLAS] President Donald Trump told US airlines battling Qatar Airways to take the dispute to regulators, dashing their hopes that he would champion their cause and potentially alter Open Skies agreements with Qatar, said people familiar with the matter.

Mr Trump emphasised a Department of Transportation dispute-resolution process during his meeting Thursday with the heads of major carriers, said the people, who asked not to be named because the discussions were private. Attendees included the chief executive officers of the world's two largest airlines, American Airlines Group Inc and United Airlines Holdings Inc.

The president signalled that he wouldn't intervene directly in the issue on behalf of American, United and Delta Air Lines Inc, which was seen as a setback by members of the Partnership for Open & Fair Skies, the airlines' lobby group, said one of the people. It's unclear how Transportation Secretary Elaine Chao will address any complaints on the matter, or if the administration would give her direction on how to proceed, another person said.

The big US carriers have complained that Qatar is using its 49 per cent stake in the parent company of Air Italy to launch further government-subsidised routes into the US. They say Qatar Airways receives unfair financial help from its government.

Also attending the White House gathering was Akbar Al Baker, the head of Qatar Airways, along with the CEOs of Atlas Air Worldwide Holdings Inc, FedEx Corp and JetBlue Airways Corp. Those three US companies have opposed American, United and Delta on the subject of the Persian Gulf carriers. Delta CEO Ed Bastian didn't attend the meeting, an absence that Mr Trump noted more than once, according to two people familiar with the meeting.

The Persian Gulf aviation dispute dates to 2015 when the US airlines accused Qatar Airways, Emirates and Etihad Airways of unfair competition and asked the Obama administration to intervene.

In the meantime, the State Department, which oversees negotiations on Open Skies agreements, is also mulling the possibility of modifying the so-called model text that forms the basis for such deals, according to one of the people. The goal would be to make it more clear what constitutes a government subsidy, in hopes of avoiding disagreements like the one over Qatar Airways in the future, the person said.

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