United Airlines plans to scrap its only direct flight between the U.S. and Dubai in late January after seven years of operation due to what it called the addition of “subsidized” capacity by Emirates Airline and Etihad Airways into Washington D.C., the company revealed in an internal memo released Wednesday. United’s withdrawal means no U.S. airline will fly directly to Dubai after Delta Air Lines drops its service between Atlanta and the Gulf emirate in Februrary.
“Due to Gulf carriers’ expansion and a recent U.S. government decision, we are discontinuing our Washington Dulles-Dubai service,” said United. “Our last departure from Washington, D.C., to Dubai will be on January 23, 2016, and the last departure from Dubai will be on January 25, 2016. Our joint venture partners Lufthansa Group and Air Canada will continue to serve Dubai.”
In August, the General Services Administration (GSA) announced that it awarded a U.S. government contract for 2016 on the Washington-Dubai route to JetBlue, a codeshare partner of Emirates Airline. The Dubai-based carrier will fly the route for JetBlue and carry some 15,000 government employees. United’s formal protest of the decision proved unsuccessful.
“It is unfortunate that the GSA awarded this route to an airline that has no service to the Middle East and will rely entirely on a subsidized foreign carrier to transport U.S. government employees, military personnel and contractors,” said United regulatory and policy vice president Steve Morrissey. “We believe this decision violates the intent of the Fly America Act, which expressly limits the U.S. government from procuring commercial airline services directly from a non-U.S. carrier. For the Washington to Dubai route, JetBlue merely serves as a booking agent for Emirates.”
United and fellow U.S. carriers American Airlines and Delta Air Lines have formed a lobbying group called the Partnership for Open and Fair Skies in an effort to convince the Obama Administration to revisit open skies agreements with the United Arab Emirates and Qatar. The so-called Big Three U.S. carriers contend that that Qatar Airways, Etihad Airways and Emirates Airline all benefit unfairly from government subsidies. Not all the U.S. airlines have joined the campaign against the Persian Gulf carriers, however, as the likes of FedEx fear that other countries might retaliate by limiting their overseas operations.
Meanwhile, the Gulf airlines not only deny the accusation, they charge that the U.S. airlines have benefitted from several anti-competitive policies of the U.S. government, including generous “stabilization grants,” public assumption of pension obligations, loan guarantees and bankruptcy relief from debt and other obligations following the terrorist attacks of Sept. 11, 2001.