The report that has been the subject of so many headlines in the past weeks is finally out for everyone to read: Delta, American and United have released the white paper providing what they claim is proof of heavy subsidies received by Emirates, Etihad and Qatar Airways 

These massive subsidies have enabled Qatar, Etihad and Emirates to rapidly expand their fleets and international routes, distorting the commercial aviation marketplace and diverting global traffic to their hubs.

The summary of their findings, below, shows the areas of what they call unfair competition:


The Economist weighed in on the debate and is seemingly siding with the view that those numbers can be read as market distortion:

First, the sheer scale of equity apparently being provided to the Gulf carriers dwarfs what any privately owned airline could hope to secure for start-up capital. Second, debt guarantees are two different animals in the public and private sector. In the latter, they are provided when a shareholder believes there is little to no chance that the debt will be defaulted on; in the former, they are provided irrespective of the likelihood of repayment, effectively kicking the borrowings into the long grass. On both counts, the Gulf carriers enjoy clear financial advantages over their American and European rivals, affording them a safety net which permits them to operate unprofitable services in order to gain market share.

The full report, which you can peruse at the end of this post, also points out at distortions via the use of cheap labor and tax-free regimes (which is one of Emirates' arguments to hire staff).

We will be discussing this (again) on the next episode of the podcast—we believe it's more complicated than both accounts above. You can hear our current thoughts in episode 004 (starting at 0:56)

On episode 005 (starting at 1:27), in which we also briefly looked at the inception of the Gulf airlines and why they were at the center of such a debate (starting at 53:13):

And finally in episode 006, to discuss Emirates' report on its impact to the European economy (starting at 6:55)

This Gulf airlines haven't yet commented the white paper, as they've just received it as well. It's pretty certain that we will see some counter-attacks (the anti-trust immunity, fuel tax rebates across a majority of U.S. states or the pension liabilities transfers come to mind) and a potential revival of the debate in Europe. This is really far from over.

Even within the U.S., sides are still being formed. Boeing, FedEx, JetBlue, U.S. airports are, for instance, siding against negating any Open Skies agreements, whilst the Air Line Pilots Association along with some Congress representatives are asking for an official stance on renegotiating the deals (you can follow the #FairSkies hashtag on Twitter to see that side of the campaign).

Here is the full report: