Trump Asked To Block Air Italy, In Attack On Qatar’s Investment

Eleven U.S. Senators (led by Senator Ted Cruz) have written to President Trump’s administration criticising Italian airline, Air Italy — specifically citing urgent need for action in relation to Air Italy’s routes to both New York and Miami.

In 2017, Qatar Airways acquired a 49% stake in AQA Holding, the parent company of Meridiana Fly, which was later rebranded as Air Italy. With Qatar’s investment, Air Italy is now set to become a significant airline player in Italy, and perhaps one day, the largest, given the uncertainty surrounding bankrupt-Alitalia.

In the letter to the Trump administration, Senators questioned Air Italy’s ability to launch U.S. services, claiming Air Italy’s flights to the United States threatens American airlines and jobs, while adding that Air Italy’s entry into the “crowded market appears consistent with Qatar Airways pattern of adding subsidized capacity in markets where demand is already served.”

The senators said that “without funding from Qatar Airways, Air Italy would be unable to launch its new service, just as Qatar Airways would not be viable without direct support from the Qatari government.” At this point, one has to wonder if the Senators plan to launch the same attack on government-owned airlines Oman Air, Saudia, Kuwait Airways, Singapore Airlines, Royal Air Maroc, Aeroflot, Ethiopian Airlines, Finnair, Royal Jordanian, China Airlines & more, and their respective subsidiary airlines.

This specific kind of rationale used as an argument by the U.S. Senators is applicable to other state-owned airlines, and while it’s certainly true that “without funding from Qatar Airways, Air Italy would be unable to launch its new service” it’s also true that “without funding from Singapore Airlines, ‘Scoot’ would be unable to launch its new service” too — but in true ‘US airlines vs Middle East airlines’ fashion, the focus here is a Gulf Carrier.

The Senators fear Air Italy may be acting as a ‘feeder’ airline for Qatar Airways passengers to fly to the U.S. via Europe, similar to how Emirates has a (very popular) fifth freedom flight between Milan and New York.

However, Air Italy is mostly a point-to-point carrier. It has established very few codeshare agreements with airlines such as British Airways, Iberia and Qatar Airways — and hence the airline tends not to carry passengers from other airlines, but rather just those flying between A and B with Air Italy.

The route between Milan and New York is already operated by five other carriers, including American Airlines, Delta Air Lines, United, Dubai-based Emirates, and Italy’s bankrupt national carrier Alitalia — arguably one of the largest receivers of state-subsidies in recent history, the airline continues to operate  day-to-day operations on borrowed Italian government aid, despite it supposedly being a private company.

Following the letter to Trump’s administration, Air Italy announced plans to start flights to two more destinations in North America: Los Angeles and San Francisco, to be operated by Airbus A330-200s.

The Senators, led by Senator Ted Cruz, ended their letter by requesting an investigation into the airline.

Final Thought 

The US’ fight against the Gulf Carriers has been ongoing for several years, but Senator Ted Cruz’s calls on an ‘investigation’ into Air Italy over the airline launching and expanding U.S. routes is a new update to the ‘America First’ protectionism policy the U.S. frequently adopts in relation to aviation.

While the Senators highlight the ‘unfairness’ in 49% of Air Italy’s funds coming from a state-owned airline, why are other state-owned airlines continuously tolerated, or rather, ignored?  If they had assessed Air Italy’s business model correctly, they could have found that the airline has no need to act as another Qatar Airways access point to the U.S. — as Qatar Airways fly from its Doha Hamad International Airport hub to all 10 of the largest U.S. metro areas. When Air Italy operated to the U.S. under its former brand, ‘Meridiana’, there were no complaints from the U.S. Senate.

Emirates continue to fly between Dubai and New York via Milan, much to the dislike of the U.S. — however, for passengers, both Emirates’ continuation of its Milan-New York flights, and Qatar backed-Air Italy’s expansion into the U.S. is good news. Both offer a superior passenger experience when compared to the American carriers operating the route, on ageing aircraft, while continuing to charge passengers more.

Undoubtedly, Air Italy’s recently announced expansion to the U.S. (announced after the Senator’s letter to Trump) will further displease those in Washington.

Finally, it’s worth highlighting that Qatar Airways hold various stakes in multiple airlines worldwide which fly to the U.S, including airlines that have expanded to the U.S. following Qatar’s investment. The airline owns a 15% stake in British Airways parent company IAG, of whom somewhat specialise in transatlantic travel, and have a joint-venture agreement with American Airlines.

Stay with aviationanalyst.co.uk for updates…

2 thoughts on “Trump Asked To Block Air Italy, In Attack On Qatar’s Investment

  1. Isn’t this type of behaviour by the US actually against the rules that enshrine the aviation market. It’s typical behaviour of the US. They’re unable to compete in the open market so they’ll bitch and wings that they are being forced out of the market.
    If their product was of a quality that attracted a mass marjer they’d not have the problem, people would be queuing at their doors for their tickets.
    If the world decided to take similar protectionist activities with their motor car manufacturing business they could find that it does more damage to the US car market than perhaps they’d anticipate.
    Guys, grow up and make your product something that the world want to enjoy.

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