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Delta-Qatar commercial tie up not likely: Bastian

Delta Air Lines is not interested in any commercial relationship with Qatar Airways, says its chief executive Ed Bastian, even after an accord today that addresses three US carriers' subsidy allegations against their Gulf rivals.

"We have no plans," says Bastian on the possibility of a commercial tie up, for example an interline or codeshare agreement, with Qatar Airways in an interview with FlightGlobal today.

Delta and Qatar Airways have a notably tense relationship. A flash point was the Gulf carrier's inaugural flight to Atlanta in June 2016, which was forced to park at a remote position with passengers bussed to and from the terminal because the airport's few gates capable of handling an Airbus A380 were occupied by Delta aircraft.

Akbar Al Baker, chief executive of Qatar Airways, called Delta "wicked" and said the airline "ruined" its first flight to Atlanta as a result, Bloomberg reported that June.

The agreement announced today by US secretary of state Rex Tillerson includes financial disclosure and accounting requirements, as well as a commitment by Qatar Airways to not add flights to the USA from countries other than Qatar.

"The outcome we achieved will ensure a level playing field in the global aviation market," said Tillerson at the US-Qatar strategic dialogue in Washington DC.

Delta, along with American Airlines and United Airlines, have claimed since early 2015 that Qatar Airways, as well as Emirates Airline and Etihad Airways in the United Arab Emirates, have received more than $42 billion in state subsidies. These funds have allowed the Gulf carriers to essentially dump capacity in the US market under open skies.

All three Gulf carriers have denied the allegations.

SAFEGAURDS

The agreement includes safeguards against further states subsidies for Qatar Airways. Bastian says it creates commitments to end some forms of support as well as creates transparency to identify and "call out" further subsidies.

For example, Qatar has agreed to end subsidising charges at Doha Hamad International airport for Qatar Airways, he says.

Qatar Airways has allegedly benefitted from at least $616 million in passenger departure fee credits from Doha International airport, a 2015 white paper compiled by American, Delta and United on the Gulf subsidies shows. The $10.98 per passenger fee is not levied on those connecting at the airport, which accounts for about 83% of all of the carrier's passengers.

The row with the Gulf carriers is not over yet. Discussions between the US and UAE governments is set to "begin soon", both American and United say.

"We hope and anticipate that a similar resolution will be brought to bear with the UAE," says Bastian, adding that this is the next step in the process.

Such an agreement with the UAE could prompt Delta to evaluate whether or not to return to the Gulf, he says. The airline ended service to Dubai from its Atlanta base citing unfair competition with the Gulf carriers in February 2016.

Not every US carrier backs the subsidy claims made by American, Delta and United. JetBlue Airways, which codeshares with all three Gulf carriers, has been a vocal opponent of the mainline carriers and what it sees as a threat to open skies.

“The legacy carriers’ attack on open skies has officially failed, enabling US airlines like JetBlue to continue to grow and create US jobs while giving customers more choice through our global partnerships," says James Hnat, executive vice-president of corporate affairs and general counsel at JetBlue.

The new accord between Qatar and the USA will operate within the existing open skies framework, the US State Department says.

Qatar Airways declines to comment on the accord between the US and Qatari governments.

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