Delta dumps Dubai, blames 'subsidized capacity' from Gulf rivals

Bart Jansen | USA TODAY

The latest salvo in the battle between U.S. and Middle East airlines features Delta Air Lines abandoning its route from Atlanta to Dubai.

Delta has led the charge with American and United airlines in accusing three rival airlines in the Persian Gulf of receiving $42 billion in unfair subsidies during the last decade from their government owners.

But the Gulf carriers – Emirates, Etihad and Qatar – adamantly deny getting subsidies. They've argued in response that their U.S. competitors have received unfair advantages from bankruptcy law unavailable in the United Arab Emirates and Qatar. And they say they haven’t hurt U.S. airlines.

On Wednesday, Delta announced it would stop flying to Dubai effective Feb. 11, 2016. The airline said it will redeploy the Boeing 777 that flies the route to another foreign destination across the Atlantic.

The airline said flights accounting for 11,000 daily seats have been added between the U.S. and Dubai, Doha and Abu Dhabi from 2008 through 2014. But only two of the 14 daily flights to Dubai were operated by U.S. carriers: Delta from Atlanta and United from Washington Dulles.

Kate Modolo, a Delta spokeswoman, said in the statement there are too many routes between the U.S. and the Middle East “operated by government-owned and heavily subsidized airlines.”

Jill Zuckman, a spokeswoman for Partnership for Open and Fair Skies, a group of U.S. airlines and their unions organized against the Gulf rivals, said “brazen subsidization” will force U.S. carriers out of more routes and hurt the industry.

“The flood of subsidized capacity pouring into these routes has swamped any chance of fair competition, forcing U.S. carriers to cut services that American travelers rely on,” Zuckman said.

Against that backdrop, United -- one of the only two U.S. carriers to fly to the Gulf region -- just announced this week that it would drop its nonstop service between Washington Dulles and Kuwait. That route, which includes a one-stop continuation between Kuwait and neighboring Bahrain, will end in January.

The U.S. airlines -- Delta, United and American -- have asked the departments of State, Transportation and Commerce to formally open consultations with United Arab Emirates and Qatar over the subsidy allegations. The U.S. airlines want an end to the subsidies or a halt to additional U.S. flights from the Gulf carriers.

No deadline is set for a decision.

Meanwhile, the Gulf carriers all have continued to beef up their offerings to U.S. destinations. Qatar Airways, for example, announced Wednesday it would add 29 U.S. destinations to its offerings by expanding its code-sharing partnership with JetBlue through Boston. Qatar Air's own Doha-Boston route will begin in March, with the carrier flying new Airbus A350 aircraft between the cities.

“The strengthening of this code-share agreement comes at a time when Qatar Airways is focused upon expanding its own direct links to the United States and beyond, with the launch of non-stop services to Los Angeles, Atlanta and Boston throughout 2016,” said Akbar Al Baker, Qatar’s CEO.