When I wrote that United’s departure from Kuwait City was predicated upon expulsion by the Kuwaiti government, my insider source also mentioned offhandedly that Dubai would be shut down soon after because of stiff competition from Emirates. With United denying my scoop, I took the Dubai info with a grain of salt, but it turned out to be true — United will suspend service to Dubai effective January 23, 2016.
In a letter to employees, United squarely lays the blame on Emirates and Etihad–
Even though we successfully operated the IAD-DXB route for the past seven years, the entry of subsidized carriers such as Emirates Airline (EK) and Etihad Airways (EY) into the Washington, D.C., market has created an imbalance between supply and demand to the United Arab Emirates (UAE). As they’ve added subsidized capacity, our IAD-DXB route has become less profitable.
The Gulf Carriers are constantly portrayed as a vicious brood of vipers by the three U.S. legacy carriers (even as American partners with two of them, Etihad and Qatar), but the issue is not nearly as clear-cut as United reasons and will not be hashed out here. Last I checked, less profitable means still profitable.
But the “straw that broke the camel’s back” was the awarding of the Washington Dulles to Dubai route in FY2016 to JetBlue by the General Services Administration (GSA). JetBlue, of course, does not serve the Middle East but does codeshare with Emirates. In other words, U.S. taxpayers will fund travel on Emirates for U.S. government workers flying to Dubai and beyond on official business.
United estimates that Emirates will carry 15,000 U.S. government passengers under the new contract (and United also glumly adds, “including active duty military personnel”). We all get the implication…
United also claims the decision to award Jet Blue the Dubai routes undermines the Fly America Act:
“It is unfortunate that the GSA awarded this route to an airline that has no service to the Middle East and will rely entirely on a subsidized foreign carrier to transport U.S. government employees, military personnel and contractors,” said Regulatory and Policy VP Steve Morrissey. “We believe this decision violates the intent of the Fly America Act, which expressly limits the U.S. government from procuring commercial airline services directly from a non-U.S. carrier. For the Washington to Dubai route, JetBlue merely serves as a booking agent for Emirates.”
I will break down the Fly America Act in a future post on this subject.
For now, know that if you are scheduled to fly to Dubai on United beyond 23 January 2016, you will soon be receiving a schedule change notification. Codeshare service with Lufthansa and Air Canada will continue. With Kuwait and now Dubai suspended, Tel Aviv will be the last Middle East port of service for United.