Delta Air Lines has challenged Etihad Airways and Jat Airways’ application for codeshare authority, repeating its concerns about fair competition with state-supported carriers.
The Atlanta-based SkyTeam alliance carrier claims that the proposed codeshare from Belgrade, Serbia, to Chicago, New York and Washington DC via Abu Dhabi would be against the US policy of promoting a fair competition in aviation, in a filing with the US Department of Transportation (DOT) on 4 October.
“These subsidies have a market-distortive effect and are inconsistent with US international aviation policy,” says Delta, citing direct capital infusions, tax advantages, fuel and airport fee subsidies and government investment in airport infrastructure that Etihad benefits from.
Eithad announced in August that it would buy 49% of Jat, which will be renamed Air Serbia, as well as a five-year management contract and joint funding for the Serbian carrier from the Abu Dhabi government.
Delta calls the agreement “de facto control” of Jat by Etihad.
US airline industry organisation Airlines for America (A4A) and the Air Line Pilots Association (ALPA) also oppose the codeshare authority request. They cite similar fair competition concerns.
Delta’s opposition comes as it is increasingly pushing for a level playing field with foreign carriers that benefit from state support. It has a lawsuit pending against the Export-Import Bank of the US’ (US Ex-Im) widebody aircraft loan guarantees for commercially viable carriers, naming Emirates, Etihad and Korean Air in the suit.
“We feel at Delta that we, like other US carriers, have become very efficient and able to compete with anybody anywhere in the world on a level playing field,” Ben Hirst, chief legal officer at the airline, told reporters in September. “The concerns that we have is that these airlines are state-owned, state-supported and have economic objectives instead of private objectives driving them.”
Delta also objects to the specific nature of the proposed Etihad-Jat codeshare.
“It is highly unlikely that a rational consumer would seek out itineraries via Abu Dhabi unless fares were artificially low, ie, unless JAT and Etihad plan to engage in capacity dumping at below-market fares,” claims the carrier.
Delta cites the fact that a routing from Belgrade to Chicago adds about 8,047km (5,000 miles) to the journey compared to a stop in a major European hub.
Jat applied for authority to place its code on Eithad’s flights from Abu Dhabi to Chicago O’Hare, New York’s John F. Kennedy and Washington Dulles, on 19 September.