Sens. Ted Cruz, Rand Paul Lead Republican Charge Against Qatar’s Violation of Open Skies Agreement

Posted: Dec 14, 2018 1:45 PM
Sens. Ted Cruz, Rand Paul Lead Republican Charge Against Qatar’s Violation of Open Skies Agreement

In a letter to the Secretaries of Transportation, Commerce, and State dated December 3, 11 Republican Senators led by Sen. Ted Cruz (TX) and three U.S. airlines allege that the country of Qatar is using its large share in an Italian airline to violate an Open Skies agreement that prevents the Middle Eastern country from scheduling new flights to the U.S.

The text of the letter partially reads:

Open Skies agreements not only promote free market principles but they give the U.S. aviation industry the opportunity to compete around the world. Last year, concerns were raised that the governments of Qatar and the United Arab Emirates were providing subsidies to certain state-owned airlines in violation of our Open Skies agreements. I commend the administration for looking into these concerns and negotiating these agreements with both countries to ensure greater financial transparency and receiving a commitment that Gulf carriers will not conduct additional “Fifth Freedom” flights to the United States.

We are concerned that these hard-fought agreements are already being ignored.

At issue are “fifth freedom” flights — in this case flights scheduled by Air Italy, 49 percent of which is owned by Qatar Airways, including new, daily non-stop flights between Milan and New York, and four weekly flights between Milan and Miami — that the letter alleges are “commercially questionable” given that the route is served daily by 5 other airlines.

Fifth Freedom flights are named after the “freedoms of the air” principles, with the “fifth freedom” dictating a country may stop in other countries to pick up passengers after departing from its home country en route to a third country.

Kentucky Republican Senator Rand Paul also drafted a letter in mid-December, sent to the same agency heads and with roughly the same language, urging an investigation into Qatar’s behavior regarding Open skies. Paul’s letter reads in part:

Consistent with the past actions of this administration, I ask that you review the relationship between Qatar, Qatar Airways, and Air Italy and determine whether Air Italy is receiving Qatari government subsidies in violation of our Open Skies agreement.

In January, the Qatari government settled with major U.S. carriers and promised Qatari Airways would not institute another fifth freedom flight to the U.S. The U.S. Senators and U.S. air carriers — including American Airlines, Delta Air Lines and United Airlines — appear concerned that Qatar’s large stake in Air Italy and that airlines’ new direct flights, which now includes service from Milan to both Los Angeles and San Francisco, is a way to work around that January settlement.

The January settlement dealt with Qatari government subsidiesand a now-defunct plan to invest in American Airlines in 2017. The U.S. had concerns about creative accounting practices they say were used by Qatar to hide government subsidies related to their air carrier business and investment.

Scott Reed, campaign manager with the Partnership for Open & Fair Skies, an airline lobbying group, said the move by Qatar, which he says has given $25 billion in documented subsidies to Qatari Airways, to use its investment in Air Italy as a loophole to violate the Open Skies agreement with the U.S. has also violated the trust of the United States.

“With the announcement of new routes from Air Italy to the U.S., fueled by money from Qatar Airways, the government of Qatar has demonstrated a stunning lack of respect for President Trump and Secretary of State Pompeo,” Reed said.