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IAG backs Gulf carriers in subsidies battle

Qatar Airways partner IAG has come out in support of the airline and two other Gulf carriers in an ongoing dispute over alleged subsidies with US mainline carriers.

In comments filed with the US government, the airline group says it "disputes" the allegations by Delta Air Lines, American Airlines and United Airlines that Qatar, Etihad Airways and Emirates Air Line received more than $42 billion in subsidies from the Qatari and United Arab Emirates governments.

"IAG believes the evidence and therefore the conclusions to be unreliable and wholly inappropriate as a means of informing government policy decisions," says IAG. "To shield US airlines from their competitors would be to grant them the biggest subsidy of all."

IAG's support of the Gulf carriers is not surprising. Qatar Airways holds an almost 10% stake in the company, and both are partners in Oneworld. Last month, IAG carriers British Airways and Iberia withdrew from the Association of European Airlines (AEA), citing different opinions on policy issues.

AEA member Lufthansa has backed the US mainline carriers in calling for government action to examine the alleged subsidies benefiting the Gulf carriers.

The US government has said it plans to begin a review into the US mainline carriers' complaint by end-May, and is inviting public comments on the issue.

In its remarks, IAG says it "does not seek to defend specific carriers" but says it is in full support of longstanding US open-skies policy. "The global competitiveness of the US economy has been significantly enhanced by the aviation policies the DOT has pursued over the last 30 years. Turning the clock back now would be folly."

IAG has said it plans to deepen its partnership with Qatar Airways, a move which might involve joint procurement of aircraft and maintenance services. The two parties also plan to expand their codeshare.

"IAG believes that our industry functions best when competition is allowed to flourish," it says. "It is a matter of grave concern to see protectionism raising its ugly head at the first sign of effective competition from the Gulf countries."

The US mainline carriers have won the support of their unions, as well as some members of the US Congress. In a letter to US Secretary of State John Kerry today, 19 bipartisan members of the US House of Representatives judiciary committee called for the US government to begin talks with Qatar and the UAE on the alleged subsidies to the Gulf carriers.

The letter follows a similar note signed by more than 260 Congress members earlier this month.

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