DOJ WEIGHS IN ON GULF CARRIER DISPUTE; DELTA TO LEAVE TRADE GROUP

November 2, 2015

The Department of Justice (DOJ) has raised concerns about demands by American, Delta and United that the U.S. government take action in response to the alleged receipt of government subsidies by Emirates, Etihad and Qatar Airways.  DOJ does not have jurisdiction over the dispute and did not file any comments in the public DOT docket that was open until August.  According to press reports, DOJ was asked specific questions by the three agencies charged with evaluating the dispute (the Departments of Commerce, State and Transportation).  In response, DOJ antitrust officials warned of higher airfares and fewer choices for customers if DOT took any action to block flights by the three Gulf carriers.  So far, the U.S. Government has not taken any action nor has it announced a timeline for completing its review of the subsidy allegations. 

In other news, Delta announced that it will leave the U.S. airline trade group Airlines For America (A4A) effective April 2016.  Delta’s departure comes amidst strong policy differences with A4A over the Gulf Carrier dispute, Air Traffic Control reform, and the role of the Export-Import Bank.  In Europe, several carriers have left the Association of European Airlines (AEA) and are in the midst of creating their own trade group.  There are plans to call the new trade group Airlines for Europe (A4E) to mirror the name of the U.S. trade group.

If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com, 202-659-6622) or Drew Derco (dderco@eckertseamans.com, 202-659-6665).

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