March 17, 2015 / 4:14 PM / 4 years ago

U.S. House transport chair urges look at Gulf airline subsidies

WASHINGTON (Reuters) - A U.S. congressional leader on transportation issues said on Tuesday he has asked the Obama administration to look into allegations that Gulf airlines have received unfair subsidies from their home states.

U.S. airlines have accused Gulf carriers of receiving more than $40 billion in government subsidies, allowing them to drive down prices and start pushing competitors out of key markets.

The allegations appear valid, although further review of the situation is needed, U.S. House Committee on Transportation and Infrastructure Chairman Bill Shuster told reporters.

“They’re state-owned companies, and they’re getting what we believe are infusions of cash, which is not fair,” he said.

Shuster added that his committee had asked the U.S. Department of Transportation to examine the allegations closely.

“If we need to take some sort of action, that would be something we would consider,” he said.

Delta Air Lines Inc, United Continental Holdings Inc and American Airlines Group Inc have already called on the Obama administration to open talks with Qatar and the United Arab Emirates to address the allegations in revisited open skies agreements.

The Obama administration has said it takes the competition concerns of the U.S. airlines seriously, but remains “committed to the open skies policy” which it says has helped travelers, the U.S. aviation industry and the U.S. economy.

Emirates Airline President Tim Clark said Tuesday the airline would provide “a line-by-line response” to a white paper that the U.S. carriers recently made public detailing their allegations. The allegations were incorrect, he added.

Etihad Airways Chief Executive Officer James Hogan delivered a spirited defense of his company, meanwhile, at a meeting in Washington sponsored by the U.S. Chamber of Commerce Foundation.

The government of Abu Dhabi provided the national airline with startup capital and loans, Hogan said, but it did so as a shareholder and is expecting and getting returns on its investments.

“I don’t apologize for anything,” Hogan said. “Shareholder loans and equity? That’s business.”

Clark told the meeting that talks with the Department of Transportation and other regulators this week were “very constructive,” and Hogan said he had meetings with U.S. officials planned as well.

Reporting By Jeffrey Dastin, Victoria Bryan and Nadia Saleem; Editing by Tom Brown

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