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American to end Etihad and Qatar codeshares

American Airlines will end its codeshare agreements with Etihad Airways and Qatar Airways in March 2018, as US mainline carriers' dispute over open skies with the Gulf continues.

"Given the extremely strong public stance that American has taken on the ME3 issue, we have reached the conclusion that the codesharing relationships between American and these carriers no longer make sense for us," says a spokesman for the Fort Worth-based Oneworld Alliance carrier.

American, along with Delta Air Lines and United Airlines, claim that Emirates Airline, Etihad and Qatar have benefitted from more than $40 billion in government subsidies that have allowed those carriers to dump capacity in the US market under open skies. They have sought consultations between the US and Qatari and Emirati governments on the issue since early 2015.

Executives at all three Gulf carriers have denied the allegations.

American will end its codeshares with Etihad and Qatar on 24 March 2018, the spokesman says. Interline and other agreements remain unchanged.

Both American and Qatar are members of Oneworld.

"We view the decision by American Airlines as being anti-competitive and anti-consumer," says a spokesperon for Etihad who adds that they are "disappointed" with the move. "This action will reduce choices for consumers and may result in higher fares for travellers to and from the United States."

American notified Etihad and Qatar of the move on 29 June, a week after it notified shareholders of an unsolicited offer by the latter to acquire up to a 10% share in the US carrier.

"[The proposed investment] strengthens our resolve to ensure the US government enforces its trade agreements regarding fair competition with Gulf carriers," said Doug Parker, chairman and chief executive of American, in a letter to employees on 22 June. "We must make it crystal clear that no minority investment in American will ever dissuade us from doing what is right for our team members, our customers and all of our shareholders."

A week after the proposed investment was disclosed, Qatar chief Akbar Al Baker called Parker "frightened"of the investment. He has since generated outrage among labour groups after calling US mainline carriers' cabin crew "grandmothers" in public comments.

Terminating the Etihad and Qatar codeshares marks a change of tune for American. In May 2015, Parker said that their issue was about government policy in Qatar and the United Arab Emirates, and not with the individual carriers.

“The fact that we have material relationships to get our customers to places we don’t serve, doesn’t mean that our government shouldn’t ensure that there is fair trade with other governments,” he said.

Parker even said at the time that he would be happy to meet with Al Baker to discuss their partnership.

Qatar was not immediately available for comment.

Updated with Etihad comment

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