Later today U.S. Secretary of State Rex Tillerson will announce a sweeping deal that will put to rest the dispute between U.S. carriers and Qatar Airways. But who is the real winner here?
Qatar Airways will agree not to run indirect flights to the USA (Fifth Freedom flights) “for now” and will become more financially transparent. This greater transparency will include the use of internationally recognized accounting standards and the publishing of audit results and annual reports.
That’s it. An agreement to avoid adding Fifth Freedom flights…for now…and financial transparency that Qatar will still control.
Listening to Peter Carter, Delta’s chief legal officer, you’d be forgiven for thinking Delta just won World War III:
This would be a landmark milestone for the American airline industry that will protect our workers and ensure that our foreign competitors play by the rules and do not undermine our international agreements. We all support the administration as it holds their feet to the fire to ensure they live up to their commitments.
This from the airline that is buying Airbus instead of Boeing jets…
We can’t put our competition solely in the hands of Washington, we have to compete in the marketplace…That’s why we are continuing to invest in our international fleet with the new Airbus A350s while working hard with our partners to invest and to improve the quality of service together.
Did you catch that? Bastian is acknowledging that improved service comes through competition. Thus, I think we can fairly extrapolate that had the U.S. government more aggressively protected Delta, we’d see service levels decline. And why not? Why would Delta need to compete if the market did not force it to?
Really, this news is about allowing Delta (and to a lesser degree United and American) to save face. Their jingoistic arguments against Gulf Carriers do not hold up, but these token gestures by Qatar allow Bastion and company to declare victory.
Meanwhile, Qatar will continue to hold stakes in carriers including Aer Lingus, British Airways, Iberia, and Meridiana. The result is similar to any Fifth Freedom flying Qatar Airways did on its own: feeder flights for Qatar.
Did Delta really win this round? I’m not so sure.